Broadband Access and Innovation

Hong Yu Xiao, Business Economics and Public Policy, The Wharton School, and Xiao Wang, Business Economics and Public Policy, The Wharton School

Abstract: Does higher internet speed drive entrepreneurship and innovation? If there is an effect, is it driven by an increase in the overall number of entrepreneurs, or in the probability of their success?

We employ an instrumental variables strategy using historical measures of long-distance telephone infrastructure as an instrument for the supply of high-speed internet services today, to estimate the effect of availability of highs-speed internet on long-run entrepreneurial success within each zip code.