Broadband Internet, Firm Performance, and Worker Welfare: Evidence and Mechanism

Abstract

This paper examines the effect of high-speed internet on firm's productivity and worker's wage in China. We exploit a national policy reform and devise a differencein-difference strategy to address the endogeneity. We find that high-speed internet significantly increases firm's productivity and worker's wage, and the estimate is larger for firms in industries with high skill intensity and for more educated workers. We provide suggestive evidence that the mechanism is likely from firm's increased use of skill-biased technology and the flattened management organization. (JEL O2, O3, J3)

The Day After Covid-19: Implications for Growth, Specialization, and Inequality

“…The positive effect of the diffusion of communication services on growth is well documented in the literature, at least since Hardy (1980); see Kolko (2012) and Castaldo et al (2018) for studies focusing on the effect of broadband adoption on growth, Gómez-Barroso and Marbán-Flores (2020) for a literature review on telecommunications more generally, and Xu et al (2019) who instead focus more specifically on access to the internet as a determinant of innovation. In line with this paper, Mack and Rey (2014) report a generally positive relationship between broadband adoption and the level of knowledge intensive activities across US metropolitan areas but also that specialization in traditional manufacturing has a negative impact on this relationship; Chen et al (2020) find that high-speed internet significantly increases productivity, but the effect is stronger for the more educated workers (but see Maurseth, 2018, who finds the opposite effect by extending the period of analysis).…”

Does the Adoption of Mobile Internet Technology Promote Wheat Productivity? Evidence from Rural Farmers

“…In recent years, the global popularity of ICTs has attracted a lot of attention from the academic community [37][38][39], and most studies have shown that the adoption of ICTs has a significant impact on agricultural productivity in emerging countries [40][41][42], which is positively coined the "Digital Dividend". Min et al [37] reviewed studies on the impact of ICT adoption on agricultural development and summarized the possible impact mechanisms, such as better access to information, farmer knowledge, input and output supply chain management, improved delivery services, reduced transaction value, as well as farm credit and health insurance.…”

Female rural–urban migrants and online marketplaces in emerging economies: Evidence from Thailand and Vietnam

“…Regarding the welfare impact of internet use, the evidence is mixed. Some authors find a positive and significant effect of internet use on income in developing countries (Bailur & Masiero, 2017), which helps to reduce poverty (Chang & Just, 2009; Chen et al., 2020). Others find a significant but negative income effect as labour productivity is negatively affected by adjustment costs related to learning and the relocation of labour and other activities.…”