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Productivity, technological innovations and broadband connectivity: firm-level evidence for ten European countries

  • Eric J. Bartelsman
  • Martin Falk
  • Eva Hagsten
  • Michael Polder
Regular Article
  • 4 Downloads

Abstract

This study investigates the link between productivity and innovations (technological as well as non-technological), taking into account the information and communication technology (ICT) intensity of firms, measured as the proportion of broadband internet connected employees. The analysis is based on official firm-level data on innovation activities and ICT usage in firms for the years 2002–2010, linked to the business registers and the production statistics in ten European countries. The datasets encompass 117,000 firm-year observations. Estimation results reveal that firm productivity is significantly related to product innovations, but to a lesser extent than broadband connected employees. The strength of the association varies across countries and between manufacturing and service firms. As a contrast, process, marketing and organizational innovations are not significantly related to productivity in the majority of countries. Overall, broadband usage appears to be a better predictor of productivity than product innovations.

Keywords

Firm-level data Broadband usage Technological innovations Productivity Firm behavior 

JEL Classification

C81 D22 O33 

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Copyright information

© Eurasia Business and Economics Society 2018

Authors and Affiliations

  1. 1.Vrije UniversiteitAmsterdamThe Netherlands
  2. 2.Tinbergen InstituteAmsterdamThe Netherlands
  3. 3.Austrian Institute of Economic Research (WIFO)ViennaAustria
  4. 4.University of IcelandReykjavíkIceland
  5. 5.Statistics NetherlandsThe HagueThe Netherlands

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