Broadband adoption and firm productivity: Evidence from Irish manufacturing firms

• We examine the effects of DSL broadband adoption on firm productivity and productivity growth in a panel of Irish manufacturing firms.
• We address potential endogeneity issues by using a two-stage least squares estimator with geographical broadband availability as an instrument.
• We are able to compare the effects of broadband adoption on firm productivity across different types of broadband and different broadband speeds.
• While more productive firms are more likely to use DSL, we do not find a significant effect of broadband adoption on firms׳ productivity (growth).
• Our results do not support the view that accelerated adoption of high speed broadband would significantly benefit industrial productivity.

We estimate the effects of adopting DSL broadband on firm productivity and productivity growth allowing for differing broadband speeds. We use a two-stage least squares estimator with geographical broadband availability as an instrument to address some potential endogeneity problems in a panel of Irish manufacturing firms. While more productive firms are on average more likely to be using DSL broadband, we find no statistically significant effect of broadband adoption on firms׳ productivity or productivity growth.