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Does State Aid for Broadband Deployment in Rural Areas Close the Digital and Economic Divide?

Wolfgang Briglauer, Niklas S. Dürr, Oliver Falck () and Kai Hüschelrath
Authors registered in the RePEc Author Service: Kai Hueschelrath

No 6947, CESifo Working Paper Series from CESifo Group Munich

Abstract: We evaluate the impact of a major European state aid programme for broadband deployment applied to rural areas in the German state of Bavaria in the years 2010 and 2011. Using matched difference-in-differences estimation strategies, we find that aided municipalities have – depending on broadband quality – between 18.4 and 25.4 percentage points higher broadband coverage than non-aided municipalities. This increase in broadband coverage, closing the digital divide, results in an average increase of six employed individuals living in the respective aid-receiving municipalities while leaving the number of employed (measured at the place of work) or self-employed individuals and wages unaffected. We therefore conclude that an increase in broadband coverage through state aid protects rural areas from depopulation, but does not contribute to a further closing of the economic divide in the form of creating new jobs.

Keywords: : government policy; state aid; ex-post evaluation; broadband; employment; rural areas; European Union; Germany; Bavaria (search for similar items in EconPapers)
JEL-codes: D62 D73 G38 H23 J23 K23 L52 L96 L98 R23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-ict, nep-law, nep-lma, nep-pay and nep-reg
Date: 2018
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Related works:
Journal Article: Does state aid for broadband deployment in rural areas close the digital and economic divide? (2019) Downloads
Working Paper: Does state aid for broadband deployment in rural areas close the digital and economic divide? (2016) Downloads
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