Broadband and Productivity: Structural Estimates for Germany

65 Pages Posted: 4 Jan 2022

See all articles by Tomaso Duso

Tomaso Duso

German Institute for Economic Research (DIW Berlin); TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization; Centre for Economic Policy Research (CEPR)

Mattia Nardotto

KU Leuven

Alexander Schiersch

German Institute for Economic Research (DIW Berlin)

Date Written: December 2021

Abstract

We study the impact of broadband availability on firms’ total factor productivity (TFP) using German firm-level data between 2010 and 2015. We adopt a control function approach to causally identify and separately estimate productivity for 46 two-digit manufacturing and service sectors. Over the sample period, broadband availability, measured by 16 Mbps transmission rates, more than doubled in German municipalities. While this increased broadband availability has almost no effect on firms’ productivity in manufacturing, it significantly increases TFP in most service sectors. Yet, the size of the effect is heterogenous across industries.

Keywords: Broadband internet, productivity, firm-level data

JEL Classification: D24,D22,J24,O14,O22,O33

Suggested Citation

Duso, Tomaso and Nardotto, Mattia and Schiersch, Alexander, Broadband and Productivity: Structural Estimates for Germany (December 2021). DIW Berlin Discussion Paper No. 1988, Available at SSRN: https://ssrn.com/abstract=3998913 or http://dx.doi.org/10.2139/ssrn.3998913

Tomaso Duso (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization ( email )

Berlin, 10585
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Mattia Nardotto

KU Leuven ( email )

Naamsestraat 69
Leuven, 3000
Belgium

HOME PAGE: http://sites.google.com/site/mattianardotto/Home

Alexander Schiersch

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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