IDEAS home Printed from https://ideas.repec.org/a/eee/telpol/v47y2023i2s0308596122001823.html
   My bibliography  Save this article

Ultra-broadband investment and economic resilience: Evidence from the Covid-19 pandemic

Author

Listed:
  • Abrardi, Laura
  • Sabatino, Lorien

Abstract

We study the role of ultra-broadband infrastructures in reducing the economic recession caused by the 2020 pandemic. We exploit the variation in GDP and employment that happened between 2019 and 2020 as a result of the Covid-19 pandemic outbreak, and we investigate whether UBB investments had an impact on economic resilience. We use micro-level data on UBB exposure in 2019 matched with municipality-level information on local GDP and employment levels based on tax declarations for the period 2019–2020. We address the endogeneity between UBB and local income by exploiting the distance from the closest backbone node of the upstream telecommunication network. We find that exposure to UBB mitigates the negative effect of the pandemic on local employment. One additional year of UBB exposure increases local employment by 1.3 percentage points. The effect is stronger in areas hit more severely by the pandemic, thus confirming the role of advanced broadband infrastructures on the economic resilience from negative shocks.

Suggested Citation

  • Abrardi, Laura & Sabatino, Lorien, 2023. "Ultra-broadband investment and economic resilience: Evidence from the Covid-19 pandemic," Telecommunications Policy, Elsevier, vol. 47(2).
    • Handle: RePEc:eee:telpol:v:47:y:2023:i:2:s0308596122001823
    DOI: 10.1016/j.telpol.2022.102480
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0308596122001823
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.telpol.2022.102480?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Oliver Falck & Robert Gold & Stephan Heblich, 2014. "E-lections: Voting Behavior and the Internet," American Economic Review, American Economic Association, vol. 104(7), pages 2238-2265, July.
    2. Anders Akerman & Ingvil Gaarder & Magne Mogstad, 2015. "The Skill Complementarity of Broadband Internet," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1781-1824.
    3. Kolko, Jed, 2012. "Broadband and local growth," Journal of Urban Economics, Elsevier, vol. 71(1), pages 100-113.
    4. Wolfgang Briglauer & Klaus Gugler, 2019. "Go for Gigabit? First Evidence on Economic Benefits of High‐speed Broadband Technologies in Europe," Journal of Common Market Studies, Wiley Blackwell, vol. 57(5), pages 1071-1090, September.
    5. Abrardi, Laura & Cambini, Carlo, 2019. "Ultra-fast broadband investment and adoption: A survey," Telecommunications Policy, Elsevier, vol. 43(3), pages 183-198.
    6. Chris Forman & Avi Goldfarb & Shane Greenstein, 2012. "The Internet and Local Wages: A Puzzle," American Economic Review, American Economic Association, vol. 102(1), pages 556-575, February.
    7. Katz, Raúl & Jung, Juan & Callorda, Fernando, 2020. "Can digitization mitigate the economic damage of a pandemic? Evidence from SARS," Telecommunications Policy, Elsevier, vol. 44(10).
    8. Hasbi, Maude, 2020. "Impact of very high-speed broadband on company creation and entrepreneurship: Empirical Evidence," Telecommunications Policy, Elsevier, vol. 44(3).
    9. Nina Czernich & Oliver Falck & Tobias Kretschmer & Ludger Woessmann, 2011. "Broadband Infrastructure and Economic Growth," Economic Journal, Royal Economic Society, vol. 121(552), pages 505-532, May.
    10. Fabling, Richard & Grimes, Arthur, 2021. "Picking up speed: Does ultrafast broadband increase firm productivity?," Information Economics and Policy, Elsevier, vol. 57(C).
    11. Briglauer, Wolfgang & Dürr, Niklas & Gugler, Klaus, 2021. "A retrospective study on the regional benefits and spillover effects of high-speed broadband networks: Evidence from German counties," International Journal of Industrial Organization, Elsevier, vol. 74(C).
    12. Isley, Catherine & Low, Sarah A., 2022. "Broadband adoption and availability: Impacts on rural employment during COVID-19," Telecommunications Policy, Elsevier, vol. 46(7).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Briglauer, Wolfgang & Stocker, Volker, 2020. "Bedeutung digitaler Infrastrukturen und Dienste und Maßnahmen zur Förderung der Resilienz in Krisenzeiten," Policy Notes 42, EcoAustria – Institute for Economic Research.
    2. Briglauer, Wolfgang & Dürr, Niklas S. & Gugler, Klaus, 2019. "A retrospective study on the regional benefits and spillover effects of high-speed broadband networks: Evidence from German counties," ZEW Discussion Papers 19-026, ZEW - Leibniz Centre for European Economic Research.
    3. Cambini, Carlo & Grinza, Elena & Sabatino, Lorien, 2023. "Ultra-fast broadband access and productivity: Evidence from Italian firms," International Journal of Industrial Organization, Elsevier, vol. 86(C).
    4. Luo, Qi & Hu, Haoyu & Feng, Dawei & He, Xiaogang, 2022. "How does broadband infrastructure promote entrepreneurship in China: Evidence from a quasi-natural experiment," Telecommunications Policy, Elsevier, vol. 46(10).
    5. Briglauer, Wolfgang & Dürr, Niklas S. & Falck, Oliver & Hüschelrath, Kai, 2019. "Does state aid for broadband deployment in rural areas close the digital and economic divide?," Information Economics and Policy, Elsevier, vol. 46(C), pages 68-85.
    6. Briglauer, Wolfgang & Dürr, Niklas & Gugler, Klaus, 2021. "A retrospective study on the regional benefits and spillover effects of high-speed broadband networks: Evidence from German counties," International Journal of Industrial Organization, Elsevier, vol. 74(C).
    7. Briglauer, Wolfgang & Cambini, Carlo & Gugler, Klaus, 2023. "Economic benefits of high-speed broadband network coverage and service adoption: Evidence from OECD member states," Research Papers 23, EcoAustria – Institute for Economic Research.
    8. Canzian, Giulia & Poy, Samuele & Schüller, Simone, 2019. "Broadband upgrade and firm performance in rural areas: Quasi-experimental evidence," Regional Science and Urban Economics, Elsevier, vol. 77(C), pages 87-103.
    9. Briglauer, Wolfgang & Dürr, Niklas & Gugler, Klaus, 2019. "A Retrospective Study on the Regional Benefits and Spillover Effects of High-Speed Broadband Networks: Evidence from German Counties," 30th European Regional ITS Conference, Helsinki 2019 205171, International Telecommunications Society (ITS).
    10. Biedny, Christina & Whitacre, Brian & Gallardo, Roberto, 2022. "Do ‘dig once’ and permitting policies improve fiber availability?," Telecommunications Policy, Elsevier, vol. 46(5).
    11. Wolfgang Briglauer & Michał Grajek, 2021. "Effectiveness and efficiency of state aid for new broadband networks: Evidence from OECD member states," ESMT Research Working Papers ESMT-21-01, ESMT European School of Management and Technology.
    12. Mossberger, Karen & LaCombe, Scott & Tolbert, Caroline J., 2022. "A new measure of digital economic activity and its impact on local opportunity," Telecommunications Policy, Elsevier, vol. 46(1).
    13. Gabriel Ahlfeldt & Pantelis Koutroumpis & Tommaso Valletti, 2017. "Speed 2.0: Evaluating Access to Universal Digital Highways," Journal of the European Economic Association, European Economic Association, vol. 15(3), pages 586-625.
    14. Czernich, Nina, 2014. "Does broadband internet reduce the unemployment rate? Evidence for Germany," Information Economics and Policy, Elsevier, vol. 29(C), pages 32-45.
    15. Stockinger, Bastian, 2017. "The effect of broadband internet on establishments' employment growth: evidence from Germany," IAB-Discussion Paper 201719, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    16. Bastian Stockinger, 2019. "Broadband internet availability and establishments’ employment growth in Germany: evidence from instrumental variables estimations," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 53(1), pages 1-23, December.
    17. Falck, Oliver & Heimisch-Roecker, Alexandra & Wiederhold, Simon, 2021. "Returns to ICT skills," Research Policy, Elsevier, vol. 50(7).
    18. Lehtonen, Olli, 2020. "Population grid-based assessment of the impact of broadband expansion on population development in rural areas," Telecommunications Policy, Elsevier, vol. 44(10).
    19. Yang, Mengjun & Zheng, Shilin & Zhou, Lin, 2022. "Broadband internet and enterprise innovation," China Economic Review, Elsevier, vol. 74(C).
    20. Yu, Binbin, 2022. "The Impact of the Internet on Industrial Green Productivity: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 177(C).

    More about this item

    Keywords

    Ultra-broadband (UBB); Fiber-based networks; Resilience; Covid-19;
    All these keywords.

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:47:y:2023:i:2:s0308596122001823. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.