Broadband Provision and Firm Location in Ohio: An Exploratory Spatial Analysis

Abstract

Information and communication technologies (ICTs) are often cited as an important factor in firm location decisions. This is especially true for firms engaged in information intensive activities and those that have a strong need for advanced services such as broadband. Despite the suggested importance of these technologies, quantitative work evaluating the link between firm location and broadband provision is sparse and existing knowledge remains largely theoretical and speculative. However, theoretical evaluations of the impact of ICTs on firm location do provide a foundation for quantitative analyses of this relationship and may be grouped into three schools of thought: the deconcentration school, the concentration school, and the heterogeneous effects school. The predictions made by these three schools of thought will be analysed in an exploratory context to better understand the relationship between firm location and ICTs, with a focus on broadband service provision. A combination of basic spatial statistical analytical tools and geographic information systems (GIS) will be used in an exploratory spatial data analysis framework to evaluate the relationship between firm location and broadband provision trends from 1999 to 2004 in the state of Ohio. Results suggest that changes in broadband provision have no relationship with changes in firm location. However, a disaggregated, firm level analysis of this relationship does provide statistically significant results for a subset of industrial sectors. Firm size is also found to impact the correlation between firm presence and broadband provision. These results suggest that firm size and industry are perhaps critical components in determining the relative importance of ICTs, such as broadband, in firm location decisions. Copyright (c) 2008 by the Royal Dutch Geographical Society KNAG.

Who’s Superconnected and Who’s Not? Investment in the UK’s Information and Communication Technologies (ICT) Infrastructure

“…The employees of these firms are also likely to be highly educated and highly technologically savvy to the extent that they consume a wide variety of digital services themselves. Mack & Grubesic (2009) identified that information, finance & insurance, and professional, scientific and technical employment are highly correlated with broadband provision. A statistically significant relationship exists between broadband and establishments, but the intensity of this depends on firm size and industry.…”

Efficiency in broadband service provision: A spatial analysis

“…The inputs utilized for benchmarking ZIP code areas within the broadband core are displayed in Table 2 and are largely based on prior confirmatory statistical work that links these variables to broadband provision (Flamm & Chaudhuri, 2007;Grubesic, 2003Grubesic, , 2006Mack & Grubesic, 2009;Prieger, 2003). For example, in the provision of broadband, regions with a higher population are often considered more attractive because they represent a larger pool of potential customers.…”

“…broadband) compares to other regions. This type of information is important for regional development efforts as allied agencies attempt to deploy the appropriate mix of resources to attract businesses in an increasing competitive global economy (Gulati, Nohria, & Zaheer, 2000;Mack & Grubesic, 2009). As the results of this paper indicate, the use of DEA allows one to benchmark regional performance in attracting broadband provision-providing a more complete picture of regional status and competitiveness.…”

“…Previous research suggests that areas with higher population density, education and income levels combined with a younger populace are often key ''ingredients'' for broadband provision (Flamm & Chaudhuri, 2007;Grubesic, 2006;Prieger, 2003;Prieger & Hu, 2008). The presence of small and medium-sized enterprises engaged in information intensive industries has also been shown to be a positive determinant for broadband provision (Forman, Goldfarb, & Greenstein, 2005;Mack & Grubesic, 2009). What remains unclear, however, is the optimal amount and combination of each ingredient required to attract broadband provision.…”

“…As a result, it is not surprising that communities such as Alpharetta are both located in the broadband core and are highly efficient at attracting providers. In addition to the employees of these information intensive firms demanding broadband services at home, it is also likely that many of the small-or medium-sized enterprises that cannot afford a dedicated fiber optic connection to the Internet subscribe to business-class services from local broadband providers (Forman et al, 2005;Mack & Grubesic, 2009).…”