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Picking up speed: Does ultrafast broadband increase firm productivity?

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  • Fabling, Richard
  • Grimes, Arthur

Abstract

We estimate productivity gains and employment effects of ultrafast broadband (UFB) adoption and test whether effects differ when firms undertake complementary organizational investments. Using an IV strategy based on proximity to schools (that were targeted in the UFB roll-out), we find that UFB adoption has a positive impact on multifactor productivity (MFP) over a four year horizon and a negative impact on employment (potentially due to increased outsourcing). The positive MFP effects are most clearly observed in firms that also make complementary investments to gain the most benefit from their UFB. The negative employment effects are observed especially in firms with initial low computer intensity.

Suggested Citation

  • Fabling, Richard & Grimes, Arthur, 2021. "Picking up speed: Does ultrafast broadband increase firm productivity?," Information Economics and Policy, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:iepoli:v:57:y:2021:i:c:s0167624521000251
    DOI: 10.1016/j.infoecopol.2021.100937
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    More about this item

    Keywords

    Ultrafast broadband; Fibre; Productivity; Organisational change; Complementary investments;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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