We study the impact of ultra‐broadband (UBB) internet connections on firmentry and exit dynamics. These connections are based on optical fiber cablesthat link telecommunication operators to final users, allowing a significantlyhigher performance compared with traditional copper‐line networks. Weleverage on a unique comprehensive dataset collecting municipality‐levelinformation on broadband diffusion and firm turnover in Italy for the periodof 2012–2019. Our empirical strategy exploits the staggered roll‐out of UBB,starting from 2015. Our identification strategy is based on an instrumentalvariable approach that exploits plausibly exogenous variation in the physicaland geographical peculiarities of the telecommunication infrastructure.Results suggest that UBB increases firm exit, particularly for small firms. Onthe contrary, firm entry rises only in digital intensive sectors and in the mostdeveloped geographical areas. Our findings have important implications forthe ongoing debate around the massive investments in high‐speed digitalinfrastructures, as they argue against the conventional idea that businessactivities equally benefit from last‐generation broadband technologies.
Digital highways and firm turnover / Cambini, Carlo; Sabatino, Lorien. - In: JOURNAL OF ECONOMICS & MANAGEMENT STRATEGY. - ISSN 1058-6407. - (2023). [10.1111/jems.12522]
Digital highways and firm turnover
Carlo Cambini;Lorien Sabatino
2023
Abstract
We study the impact of ultra‐broadband (UBB) internet connections on firmentry and exit dynamics. These connections are based on optical fiber cablesthat link telecommunication operators to final users, allowing a significantlyhigher performance compared with traditional copper‐line networks. Weleverage on a unique comprehensive dataset collecting municipality‐levelinformation on broadband diffusion and firm turnover in Italy for the periodof 2012–2019. Our empirical strategy exploits the staggered roll‐out of UBB,starting from 2015. Our identification strategy is based on an instrumentalvariable approach that exploits plausibly exogenous variation in the physicaland geographical peculiarities of the telecommunication infrastructure.Results suggest that UBB increases firm exit, particularly for small firms. Onthe contrary, firm entry rises only in digital intensive sectors and in the mostdeveloped geographical areas. Our findings have important implications forthe ongoing debate around the massive investments in high‐speed digitalinfrastructures, as they argue against the conventional idea that businessactivities equally benefit from last‐generation broadband technologies.File | Dimensione | Formato | |
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Economics Manag Strategy - 2023 - Cambini.pdf
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https://hdl.handle.net/11583/2978201