Does state aid for broadband deployment in rural areas close the digital and economic divide?

Arbeitspapier

We evaluate the impact of a major European state aid program for broadband deployment applied to rural areas in the German State of Bavaria in the years 2010 and 2011. Using difference-in-differences estimation strategies, we find that aided municipalities have - depending on broadband quality - a between 16.8 and 23.2 percent higher broadband coverage than non-aided municipalities. This increase in broadband coverage - closing the digital divide - results in an increase of on average seven employed individuals living in the respective aid-receiving municipalities while leaving the number of employed or selfemployed individuals or wages unaffected. We therefore conclude that an increase in broadband coverage through state aid prevents rural areas from depopulation, but does not contribute to a further closing of the economic divide in the form of creating new jobs.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 16-064

Classification and Topics

• Classification: Wirtschaft ; Externalities ; Bureaucracy; Administrative Processes in Public Organizations; Corruption ; Corporate Finance and Governance: Government Policy and Regulation ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Labor Demand ; Regulated Industries and Administrative Law ; Industrial Policy; Sectoral Planning Methods ; Telecommunications ; Industry Studies: Utilities and Transportation: Government Policy ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
• Subject: government policy ; state aid ; ex-post evaluation ; broadband ; employment, rural areas ; European Union ; Germany ; Bavaria

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Briglauer, Wolfgang ; Dürr, Niklas S. ; Falck, Oliver ; Hüschelrath, Kai
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/146904
• URN: urn:nbn:de:bsz:180-madoc-414942
• Last update: 10.03.2025, 11:42 AM CET