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Do Gigabits Mean Business? “Ultra-Fast” broadband availability's effect on business births

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  • Biedny, Christina
  • Whitacre, Brian E.
  • Van Leuven, Andrew J.

Abstract

Recent U.S. broadband programs prioritize high-speed infrastructure with download speeds of 100 megabits per second (Mbps) or more. Some internet providers have already built broadband networks capable of gigabit speeds (1000 Mbps) and more of this infrastructure is likely forthcoming due to increased federal support. The availability of this “ultra-fast” internet may have important implications for business creation. Business-level data from Data Axle is combined with the Federal Communication Commission's Form 477 broadband availability data and aggregated to the census block group level to form a six-year panel from 2015 to 2020. We examine the effects of three thresholds of broadband speed availability on business births per 10,000 population in eight U.S. states using an event study design. Results suggest that 100+ Mbps availability increases business births for at least up to five years after being introduced. The impacts are largest in metro block groups and for select industries. Relative to block groups treated at the 100 Mbps level, access to 250 Mbps shows additional benefits for business creation; however, the results for gigabit speed provision are less conclusive. This may change as technology continues to evolve and ultra-fast speed becomes more necessary for business operations.

Suggested Citation

  • Biedny, Christina & Whitacre, Brian E. & Van Leuven, Andrew J., 2024. "Do Gigabits Mean Business? “Ultra-Fast” broadband availability's effect on business births," Information Economics and Policy, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:iepoli:v:68:y:2024:i:c:s0167624524000167
    DOI: 10.1016/j.infoecopol.2024.101094
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    More about this item

    Keywords

    Digital divide; Broadband; Gigabit; Event study; Business births;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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