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Broadband and productivity: Structural estimates for Germany

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  • Duso, Tomaso
  • Nardotto, Mattia
  • Schiersch, Alexander

Abstract

We employ a control function methodology, complemented by various identification strategies, to causally estimate the heterogeneous effects of broadband availability on firms’ total factor productivity (TFP) across 46 two-digit manufacturing and service industries in Germany from 2010 to 2015. Throughout this period, the availability of broadband, defined as access to transmission rates of at least 16 Mbps, more than doubled across German municipalities. Our findings reveal that, while broadband availability had a negligible effect on the productivity of manufacturing firms, it exerted a significant and highly heterogeneous impact in numerous service sectors, with an estimated average increase of up to 6.8% in information and communication services.

Suggested Citation

  • Duso, Tomaso & Nardotto, Mattia & Schiersch, Alexander, 2025. "Broadband and productivity: Structural estimates for Germany," Journal of Economic Behavior & Organization, Elsevier, vol. 237(C).
    • Handle: RePEc:eee:jeborg:v:237:y:2025:i:c:s0167268125002525
    DOI: 10.1016/j.jebo.2025.107133
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    Keywords

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    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
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • 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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