Productivity and Broadband

Abstract

While the productivity paradox has been largely resolved, debate persists about the impacts of information and communications technologies on productivity, particularly as regards broadband Internet connections. To date, the bulk of the literature has not addressed the impacts of broadband provision on regional variations in productivity. This study develops a series of spatial econometric models that examine the link between broadband provision and productivity for US counties. The models developed not only consider the link between productivity and broadband provision, but they also evaluate the variability in broadband impacts that are related to the quality of human capital stock within counties. The results of the models are evidence of skill-based technological change and suggest that in general, broadband has a positive impact on productivity only in locales with high levels of human capital and/or highly skilled occupations.