Does adoption of broadband internet in firms enhance labor productivity and increase wages? And is this technological change skill biased or factor neutral? We exploit rich Norwegian data with firm-level information on value added, factor inputs and broadband adoption to answer these questions. We estimate production functions where firms can change their technology by adopting broadband internet. A public program with limited funding rolled out broadband access points, and provides plausibly exogenous variation of broadband adoption in firms. This enables us to address endogeneity of broadband adoption and examine how it shifts the production technology and changes the productivity and labor outcomes of different types of workers. We find that broadband adoption favors skilled labor by increasing its relative productivity. The increase in productivity of skilled labor is especially large for college graduates in fields such as science, technology, engineering and business. By comparison, broadband internet is a substitute for workers without high school diploma, lowering their marginal productivity. Consistent with the estimated changes in labor productivity, wage regressions show the expansion of broadband internet improves (worsens) the labor outcomes of skilled (unskilled) workers. We explore several possible explanations for the skill bias of broadband internet. We find suggestive evidence that broadband internet complements skilled workers in executing nonroutine abstract tasks, and substitutes for unskilled workers in performing routine tasks. When we use our production function estimates to construct measures of firm level productivity, we find that broadband internet accounts for a few percent of the standard deviation in total factor productivity across firms. Taken together, our findings have important implications for the ongoing policy debate over government investment in broadband infrastructure to encourage productivity and wage growth.

Does adoption of broadband internet in firms enhance labor productivity and increase wages? And is this technological change skill biased or factor neutral? We exploit rich Norwegian data with firm-level information on value added, factor inputs and broadband adoption to answer these questions. We estimate production functions where firms can change their technology by adopting broadband internet. A public program with limited funding rolled out broadband access points, and provides plausibly exogenous variation of broadband adoption in firms. This enables us to address endogeneity of broadband adoption and examine how it shifts the production technology and changes the productivity and labor outcomes of different types of workers. We find that broadband adoption favors skilled labor by increasing its relative productivity. The increase in productivity of skilled labor is especially large for college graduates in fields such as science, technology, engineering and business. By comparison, broadband internet is a substitute for workers without high school diploma, lowering their marginal productivity. Consistent with the estimated changes in labor productivity, wage regressions show the expansion of broadband internet improves (worsens) the labor outcomes of skilled (unskilled) workers. We explore several possible explanations for the skill bias of broadband internet. We find suggestive evidence that broadband internet complements skilled workers in executing nonroutine abstract tasks, and substitutes for unskilled workers in performing routine tasks. When we use our production function estimates to construct measures of firm level productivity, we find that broadband internet accounts for a few percent of the standard deviation in total factor productivity across firms. Taken together, our findings have important implications for the ongoing policy debate over government investment in broadband infrastructure to encourage productivity and wage growth.

We study the evolution of the global arms trade network using a detailed dataset on all international transfers of major conventional weapons over the period . First, we provide a careful description of the characteristics of global arms trade using tools from social network analysis. Second, we relate our …ndings to political regimes by studying whether di¤erences in democratic status a¤ect the likelihood of arms trade by estimating an empirical gravity model of trade. Our …ndings from the network analysis are much in line with common views of the Cold War. The data reveal that there is very little trade between the Warsaw Pact and NATO and that the Warsaw Pact is substantially more centralised than NATO, with the Soviet Union being more central to the former than the United States to the latter. We …nd that di¤erences in democratic status has a negative and signi…cant e¤ect on the likelihood of arms trade between two countries throughout the Cold War. After the collapse of the Soviet Union, however, it is still the case that democracies are more prone to trade with other democracies and vice versa, but the reasons for this can be entirely accounted for by exporter and importer …xed e¤ects.

Abstract. This paper offers a theoretical foundation for the existence of wholesalers and other intermediaries in international trade and analyzes their role in an economy with heterogeneous manufacturing firms and fixed costs of exporting. Wholesalers are assumed to possess a technology such that they can buy manufacturing goods domestically and sell in foreign markets and they can, unlike manufacturers, export more than one good. A wholesaler therefore faces an additional fixed cost, which increases in the number of goods it handles. The presence of wholesale firms leads to productivity sorting. The most productive firms export on their own by paying a fixed cost, but a range of firms with intermediate productivity levels export through international wholesalers. A higher fixed cost of exporting to a destination means that wholesalers handle: (i) a higher share of total export volumes to this destination and (ii) a higher share of the exported product scope (i.e., the number of exported products) to this destination. A higher fixed cost of exporting gives wholesalers a larger role, since these can spread the fixed cost across more than one good. The wholesale technology therefore exhibits economies of scope. An empirical analysis using Swedish firm-level data supports the main assumption and predictions of the model. Résumé. Une théorie du rôle des grossistes dans le commerce international Wholesalers in international trade 157telle qu'ils peuvent acheter des biens manufacturiers dans uneéconomie nationale et les vendreà l'étranger, et peuvent, ce qui n'est pas nécessairement le cas pour les manufacturiers, exporter plus qu'un bien. Un grossiste fait donc faceà un coût fixe additionnelà proportion que le nombre de biens dont on s'occupe s'accroît. La présence des firmes grossistes mèneà un départage des producteurs selon leur productivité. Les producteurs les plus productifs s'occupent eux-mêmes de leurs exportations en déboursant un coût fixe, mais unéventail de producteursà productivité intermédiaire va exporter par le truchement de grossistes internationaux. Un coût fixe plusélevé de l'exportation vers une destination donnée veut dire que les grossistes s'occupent (i) d'une portion plus grande du volume total des exportations vers cette destination, et (ii) d'une portion plus grande de la portée de produits exportés (i.e., du nombre de produits exportés) vers cette destination. Un coût fixe plusélevé de l'exportation donne aux grossistes un rôle plus important puisqu'ils peuventétaler ce coût fixe sur plus qu'un produit. La technologie du commerce en gros bénéficie donc d'économies de portée. Une analyse empirique utilisant des données suédoises au niveau de la firme confirme le postulat de base de ce modèle et ses prédictions.

Recent theories of firm heterogeneity emphasize between-firm wage differences as a new mechanism through which trade can affect wage inequality. Using linked employer-employee data for Sweden, we show that many of the stylized facts about wage inequality found in Helpman et al. (2012) for Brazil also hold for Sweden. Much of overall wage inequality arises within sector-occupations and for workers with similar observable characteristics. One notable difference is a smaller contribution from between-firm differences in wages in Sweden, which could reflect the influence of Swedish labor market institutions in dampening the scope for variation in wages between firms through collective wage agreements.