Is Super-Fast Broadband Negative? An IV-Estimation of the Broadband Effect on Firms' Sales and Employment Level

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TY - UNPB

T1 - Is Super-Fast Broadband Negative? An IV-Estimation of the Broadband Effect on Firms' Sales and Employment Level

AU - Nordin, Martin

AU - Grenestam, Erik

AU - Gullstrand, Joakim

PY - 2019

Y1 - 2019

N2 - This study investigates the relationship between super-fast broadband and firms’ sales and employment level in Sweden. It is important to learn more about this recent technological change and few studies has explored the impact of super-fast broadband on firm outcomes. We use the previous roll-out of second-generation internet access to identify the effect of third-generation internet access. The early investments in optic fiber where largely core broadband network investments paving the way for later investments in third-generation broadband technology. Municipalities choosing providers who prioritized cheap technology (broadband over telephone lines, DSL) targeting the many, thus fell behind municipalities choosing providers investing in optic fiber. We find heterogeneity in the broadband effect, but the overall effect is negative. This effect may be associated with the roll-out of 4G mobile broadband in 2011; mobile broadband services are a byproduct of optic fiber because mobile broadband is transmitted from the same high capacity fiber-optic base stations. We suggest that the negative effect found is related to internet use at work and the mixing of private and work related internet use.

AB - This study investigates the relationship between super-fast broadband and firms’ sales and employment level in Sweden. It is important to learn more about this recent technological change and few studies has explored the impact of super-fast broadband on firm outcomes. We use the previous roll-out of second-generation internet access to identify the effect of third-generation internet access. The early investments in optic fiber where largely core broadband network investments paving the way for later investments in third-generation broadband technology. Municipalities choosing providers who prioritized cheap technology (broadband over telephone lines, DSL) targeting the many, thus fell behind municipalities choosing providers investing in optic fiber. We find heterogeneity in the broadband effect, but the overall effect is negative. This effect may be associated with the roll-out of 4G mobile broadband in 2011; mobile broadband services are a byproduct of optic fiber because mobile broadband is transmitted from the same high capacity fiber-optic base stations. We suggest that the negative effect found is related to internet use at work and the mixing of private and work related internet use.

KW - broadband

KW - optic fiber

KW - firm output

KW - employment

KW - regional analysis

KW - D22

KW - J23

KW - O30

KW - R50

M3 - Working paper

T3 - Working Papers

BT - Is Super-Fast Broadband Negative? An IV-Estimation of the Broadband Effect on Firms' Sales and Employment Level

ER -