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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.

Suggested Citation

  • Bertschek, Irene & Cerquera, Daniel & Klein, Gordon J., 2013. "More bits - more bucks? Measuring the impact of broadband internet on firm performance," DICE Discussion Papers 86, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  • Handle: RePEc:zbw:dicedp:86
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    labour productivity; product and process innovation; broadband Internet;

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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