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Does State Aid For Broadband Deployment In Rural Areas Close The Digital And Economic Divide?

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  • Briglauer, Wolfgang

Abstract

We evaluate the impact of a major European state aid programme for broadband deployment applied to rural areas in the German state of Bavaria in the years 2010 and 2011. We find that aided municipalities have—depending on quality— between 16.8 and 23.2 percentage points higher broadband coverage than non-aided municipalities. This increase in broadband coverage closes the digital divide but does not contribute to a further closing of the economic divide in the form of creating new jobs.

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  • Briglauer, Wolfgang, 2017. "Does State Aid For Broadband Deployment In Rural Areas Close The Digital And Economic Divide?," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168055, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc17:168055
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    4. 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.
    5. Thonipara, Anita & Sternberg, Rolf G. & Proeger, Till & Haefner, Lukas, 2020. "Assessing the Digital Divide and its Regional Determinants: Evidence from a Web-Scraping Analysis," ifh Working Papers 25/2020, Volkswirtschaftliches Institut für Mittelstand und Handwerk an der Universität Göttingen (ifh).
    6. Duso, Tomaso & Nardotto, Mattia & Seldeslachts, Jo, 2021. "A Retrospective Study of State Aid Control in the German Broadband Market," CEPR Discussion Papers 15779, C.E.P.R. Discussion Papers.
    7. 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].
    8. Oliver Budzinski & Sophia Gaenssle & Nadine Lindstädt-Dreusicke, 2021. "The battle of YouTube, TV and Netflix: an empirical analysis of competition in audiovisual media markets," SN Business & Economics, Springer, vol. 1(9), pages 1-26, September.
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    10. Falk, Martin & Hagsten, Eva, 2021. "Impact of high-speed broadband access on local establishment dynamics," Telecommunications Policy, Elsevier, vol. 45(4).
    11. Martin Quinn & Miguel Godinho de Matos & Christian Peukert, 2022. "The Welfare Effects of Mobile Internet Access - Evidence from Roam-Like-at-Home," CESifo Working Paper Series 9612, CESifo.
    12. Abrardi, Laura & Cambini, Carlo, 2019. "Ultra-fast broadband investment and adoption: A survey," Telecommunications Policy, Elsevier, vol. 43(3), pages 183-198.
    13. Ioannou, Nikos & Logothetis, Vangelis & Petre, Konstantin & Tselekounis, Markos & Chipouras, Aris & Katsianis, Dimitris & Varoutas, Dimitris, 2021. "Network modeling approaches for calculating wholesale NGA prices: A full comparison based on the Greek fixed broadband market," Telecommunications Policy, Elsevier, vol. 45(9).
    14. Bourreau, Marc & Feasey, Richard & Nicolle, Ambre, 2020. "Assessing fifteen years of State Aid for broadband in the European Union: A quantitative analysis," Telecommunications Policy, Elsevier, vol. 44(7).
    15. Kulenkampff, Gabriele & Ockenfels, Martin & Plückebaum, Thomas & Zoz, Konrad & Zuloaga, Gonzalo, 2021. "Costs of Very High Capacity Networks and Geographic Heterogeneity – a statistical assessment for Germany," 23rd ITS Biennial Conference, Online Conference / Gothenburg 2021. Digital societies and industrial transformations: Policies, markets, and technologies in a post-Covid world 238033, International Telecommunications Society (ITS).
    16. Hasbi, Maude & Bohlin, Erik, 2021. "Impact of Broadband Quality on Median Income and Unemployment: Evidence from Sweden," 23rd ITS Biennial Conference, Online Conference / Gothenburg 2021. Digital societies and industrial transformations: Policies, markets, and technologies in a post-Covid world 238026, International Telecommunications Society (ITS).
    17. Matteucci, Nicola, 2021. "Procuring NGA infrastructure: The performance of EMAT auctions in Italy," Telecommunications Policy, Elsevier, vol. 45(1).
    18. Klein, Gordon J., 2022. "Fiber-broadband-internet and its regional impact—An empirical investigation," Telecommunications Policy, Elsevier, vol. 46(5).
    19. Pontones-Rosa, Carolina & Pérez-Morote, Rosario & Santos-Peñalver, Jesús F., 2021. "ICT-based public policies and depopulation in hollowed-out Spain: A survey analysis on the digital divide and citizen satisfaction," Technological Forecasting and Social Change, Elsevier, vol. 169(C).
    20. 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.
    21. Rosario, Pérez-Morote & Carolina, Pontones-Rosa & Montserrat, Núñez-Chicharro & Elena, Merino-Madrid, 2021. "Determinant factors of individuals’ decision to emigrate in rural Spain: The role of ICT-based public policies," Technology in Society, Elsevier, vol. 67(C).
    22. Navío-Marco, Julio & Pérez-Leal, Raquel & Ruiz-Gómez, Luis Manuel, 2019. "Analysis of the WiFi4EU initiative as a potential instrument to correct digital divide in rural areas in the EU," 30th European Regional ITS Conference, Helsinki 2019 205200, International Telecommunications Society (ITS).
    23. 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).
    24. Lei-Ju Qiu & Shun-Bin Zhong & Bao-Wen Sun & Yu Song & Xiao-Hua Chen, 2021. "Is internet penetration narrowing the rural–urban income inequality? A cross-regional study of China," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(5), pages 1795-1814, October.

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    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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