Broadband upgrade and firm performance in rural areas: Quasi-experimental evidence

Giulia Canzian; Samuele Poy; Simone Schüller

doi:10.1016/j.regsciurbeco.2019.03.002

Broadband upgrade and firm performance in rural areas: Quasi-experimental evidence

Giulia Canzian, Samuele Poy, Simone Schüller

Department of Sustainable Development and Ecological Transition

Research output: Contribution to journal › Article › peer-review

Abstract

This paper analyzes the impact of advanced (up to 20 Mbps download, up to 1 Mbps upload) broadband accessibility on firm performance by exploiting a unique local policy of a staggered broadband infrastructure upgrade across rural municipalities. In a difference-in-differences framework based on longitudinal balance sheet data for limited companies, we show that ADSL2+ availability is associated with increases in firms’ revenue and total factor productivity (by on average 14.8 and 9.1 percent cumulatively over two years), but not with significant changes in personnel cost or employment. Additional analysis of aggregate administrative data shows no significant impact on the total number of active firms or local employment. Pre-trend evaluations support a causal interpretation.

Original language	English
Pages (from-to)	87-103
Number of pages	17
Journal	Regional Science and Urban Economics
Volume	77
DOIs	https://doi.org/10.1016/j.regsciurbeco.2019.03.002
Publication status	Published - Jul 2019

Keywords

Broadband Internet
Firm performance
Infrastructure policy
Quasi-natural experiment
Regional economic development

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.regsciurbeco.2019.03.002

Cite this

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title = "Broadband upgrade and firm performance in rural areas: Quasi-experimental evidence",

abstract = "This paper analyzes the impact of advanced (up to 20 Mbps download, up to 1 Mbps upload) broadband accessibility on firm performance by exploiting a unique local policy of a staggered broadband infrastructure upgrade across rural municipalities. In a difference-in-differences framework based on longitudinal balance sheet data for limited companies, we show that ADSL2+ availability is associated with increases in firms{\textquoteright} revenue and total factor productivity (by on average 14.8 and 9.1 percent cumulatively over two years), but not with significant changes in personnel cost or employment. Additional analysis of aggregate administrative data shows no significant impact on the total number of active firms or local employment. Pre-trend evaluations support a causal interpretation.",

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T1 - Broadband upgrade and firm performance in rural areas

T2 - Quasi-experimental evidence

AU - Canzian, Giulia

AU - Poy, Samuele

AU - Schüller, Simone

PY - 2019/7

Y1 - 2019/7

N2 - This paper analyzes the impact of advanced (up to 20 Mbps download, up to 1 Mbps upload) broadband accessibility on firm performance by exploiting a unique local policy of a staggered broadband infrastructure upgrade across rural municipalities. In a difference-in-differences framework based on longitudinal balance sheet data for limited companies, we show that ADSL2+ availability is associated with increases in firms’ revenue and total factor productivity (by on average 14.8 and 9.1 percent cumulatively over two years), but not with significant changes in personnel cost or employment. Additional analysis of aggregate administrative data shows no significant impact on the total number of active firms or local employment. Pre-trend evaluations support a causal interpretation.

AB - This paper analyzes the impact of advanced (up to 20 Mbps download, up to 1 Mbps upload) broadband accessibility on firm performance by exploiting a unique local policy of a staggered broadband infrastructure upgrade across rural municipalities. In a difference-in-differences framework based on longitudinal balance sheet data for limited companies, we show that ADSL2+ availability is associated with increases in firms’ revenue and total factor productivity (by on average 14.8 and 9.1 percent cumulatively over two years), but not with significant changes in personnel cost or employment. Additional analysis of aggregate administrative data shows no significant impact on the total number of active firms or local employment. Pre-trend evaluations support a causal interpretation.

KW - Broadband Internet

KW - Firm performance

KW - Infrastructure policy

KW - Quasi-natural experiment

KW - Regional economic development

UR - https://www.scopus.com/pages/publications/85063955678

U2 - 10.1016/j.regsciurbeco.2019.03.002

DO - 10.1016/j.regsciurbeco.2019.03.002

M3 - Article

SN - 0166-0462

VL - 77

SP - 87

EP - 103

JO - Regional Science and Urban Economics

JF - Regional Science and Urban Economics

ER -

Broadband upgrade and firm performance in rural areas: Quasi-experimental evidence

Abstract

Keywords

UN SDGs

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