Impact of high-speed broadband access on local establishment dynamics

Abstract

The aim of this study is to examine the relationship between high-speed fibre broadband access and establishment dynamics at the municipality level. Special emphasis is placed on micro as well as on small and medium-sized establishments in contracting areas. Data cover information on 290 municipalities in Sweden for the period 2010–2018. Results of Fixed Effects and Spatial Durbin model estimations reveal a significant but rather small direct effect of lagged high-speed broadband access, driven by the micro establishments. However, when the proportion of establishments with high-speed broadband access is combined with the local presence of university educated employees and researchers, a stronger indirect relationship appears. There is also some evidence that the broadband availability in neighbouring municipalities has a spillover effect. A high degree of heterogeneity is found in the results, where the relationship is far weaker in contracting municipalities and in those with a low-skilled workforce.