Arbeitspapier

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

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.

Language
Englisch

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

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

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

Handle
URN
urn:nbn:de:bsz:180-madoc-414942
Last update
10.03.2025, 11:42 AM CET

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Object type

  • Arbeitspapier

Associated

  • Briglauer, Wolfgang
  • Dürr, Niklas S.
  • Falck, Oliver
  • Hüschelrath, Kai
  • Zentrum für Europäische Wirtschaftsforschung (ZEW)

Time of origin

  • 2016

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