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More bits - more bucks? Measuring the impact of broadband internet on firm performance

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  • Bertschek, Irene
  • Cerquera, Daniel
  • Klein, Gordon J.

Abstract

The paper provides empirical evidence for the causal impact of broadband Internet on firms' labour productivity and realised process and product innovations. The analysis refers to the early phase of DSL expansion in Germany from 2001 to 2003, when roughly 60 percent of the German firms already used broadband Internet. Identification relies on instrumental variable estimation taking advantage of information on the availability of DSL broadband at the postal code level. The results show that broadband Internet has no impact on firms' labour productivity, whereas it exhibits a positive and significant impact on their innovation activity. --

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Bibliographic Info

Paper provided by Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) in its series DICE Discussion Papers with number 86.

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Date of creation: 2013
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Handle: RePEc:zbw:dicedp:86

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Keywords: labour productivity; product and process innovation; broadband Internet;

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References

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  1. Hardy, Andrew P., 1980. "The role of the telephone in economic development," Telecommunications Policy, Elsevier, Elsevier, vol. 4(4), pages 278-286, December.
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  6. Bettina Peters, 2006. "Persistence of Innovation Stylised Facts and Panel Data Evidence," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 06-30, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
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  12. Cronin, Francis J. & Parker, Edwin B. & Colleran, Elisabeth K. & Gold, Mark A., 1991. "Telecommunications infrastructure and economic growth : An analysis of causality," Telecommunications Policy, Elsevier, Elsevier, vol. 15(6), pages 529-535, December.
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  14. Tobias Kretschmer, 2012. "Information and Communication Technologies and Productivity Growth: A Survey of the Literature," OECD Digital Economy Papers, OECD Publishing 195, OECD Publishing.
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  16. Bart van Ark & Mary O'Mahoney & Marcel P. Timmer, 2008. "The Productivity Gap between Europe and the United States: Trends and Causes," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 22(1), pages 25-44, Winter.
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Cited by:
  1. Jung, Juan, 2014. "Regional inequalities in the impact of broadband on productivity: Evidence from Brazil," MPRA Paper 56177, University Library of Munich, Germany.
  2. Bertschek, Irene & Niebel, Thomas, 2013. "Mobile and more productive? Firm-level evidence on the productivity effects of mobile internet use at the early stage of diffusion," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 13-118, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Nadine Fabritz, 2013. "The Impact of Broadband on Economic Activity in Rural Areas: Evidence from German Municipalities," Ifo Working Paper Series Ifo Working Paper No. 166, Ifo Institute for Economic Research at the University of Munich.
  4. Gruber, H. & Hätönen, J. & Koutroumpis, P., 2013. "Broadband access in the EU: An assessment of future economic benefits," 24th European Regional ITS Conference, Florence 2013 88492, International Telecommunications Society (ITS).
  5. Haller, Stefanie A. & Lyons, Sean, 2012. "Broadband adoption and firm productivity: evidence from Irish manufacturing firms," MPRA Paper 42626, University Library of Munich, Germany.

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