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Broadband and Productivity: Structural Estimates for Germany

Author

Listed:
  • Tomaso Duso
  • Mattia Nardotto
  • Alexander Schiersch

Abstract

We study the impact of broadband availability on firms’ total factor productivity (TFP) using German firm-level data between 2010 and 2015. We adopt a control function approach to causally identify and separately estimate productivity for 46 two-digit manufacturing and service sectors. Over the sample period, broadband availability, measured by 16 Mbps transmission rates, more than doubled in German municipalities. While this increased broadband availability has almost no effect on firms’ productivity in manufacturing, it significantly increases TFP in most service sectors. Yet, the size of the effect is heterogenous across industries.

Suggested Citation

  • Tomaso Duso & Mattia Nardotto & Alexander Schiersch, 2021. "Broadband and Productivity: Structural Estimates for Germany," Discussion Papers of DIW Berlin 1988, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1988
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.832316.de/dp1988.pdf
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    Cited by:

    1. Albert Banal-Estanol & Jo Seldeslachts & Xavier Vives, 2022. "Ownership Diversification and Product Market Pricing Incentives," Discussion Papers of DIW Berlin 2023, DIW Berlin, German Institute for Economic Research.
    2. Schiersch, Alexander & Duso, Tomaso, 2023. "Let's Switch to the Cloud: Cloud Adoption and its Effect on IT Investment and Productivity," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277571, Verein für Socialpolitik / German Economic Association.
    3. Irene Bertschek & Joern Block & Alexander S. Kritikos & Caroline Stiel, 2022. "German Financial State Aid during COVID-19 Pandemic: Higher Impact among Digitalized Self-Employed," Discussion Papers of DIW Berlin 2018, DIW Berlin, German Institute for Economic Research.
    4. Tomaso Duso & Alexander Schiersch, 2022. "Let's Switch to the Cloud: Cloud Adaption and Its Effect on IT Investment and Productivity," Discussion Papers of DIW Berlin 2017, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    broadband internet; productivity; firm-level data;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • 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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