Discussion on the working paper "Fast internet, digital vulnerabilities and firm performances in developing and transition countries"

June 23, 2017, Clermont-Ferrand

Joël Cariolle presented his paper co-written with Maëlan le Goff and Olivier Santoni.


Presentation and discussion on the paper written by Joël Cariolle, Maëlan le Goff and Olivier Santoni. Fast internet, digital vulnerabilities and firm performances in developing and transition countries Friday June 23, 15:30 Ferdi, 63 boulevard François Mitterrand, 63000 Clermont Ferrand (salle Moheau) 

Abstract

This paper provides micro evidence on the impact of fast internet on firm performances in developing and transition economies, by exploiting heterogeneities in the degree of digital isolation and exposure to telecommunication submarine cable (SMC) faults. Over the last two decades, international connectivity underwent a dramatic improvement, promoted by the laying of 321 sub-marine telecommunication cables. Almost all coastal developing countries are henceforth plugged to the global internet, so that the remaining structural impediments to internet economy’s growth are twofold: first the gap between internet users and the existing and often lacking terrestrial telecommunication infrastructure network; and second, the country’s exposure to SMC faults, induced by shipping, natural hazards, sabotage, or piracy. We estimate the impact of internet access on firm operations by adopting an instrumental variable (IV) approach reflecting these two digital obstacles, based on an original database on telecommunication infrastructure deployment. Estimations, carried out on large a sample of firms located in approximatively 60 developing and transition countries, stress that an easier access to fast internet during firms’ operations, induced by lower digital vulnerabilities, boosts their sales and their productivity, and also stimulates temporary full-time employment.

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