UNDERSTANDING BROADBAND DEMAND: AN EMPIRICAL ESTIMATION ON SMES
UNDERSTANDING BROADBAND DEMAND: AN EMPIRICAL ESTIMATION ON SMES

Summary/Abstract: Internet broadband diffusion since the beginning has up-fronted discussion among policy makers, researchers and academicians about its economic impact and technological capacity of institutions and countries. Nowadays it is undisputable that broadband contributes to the economy but it is questionable how to measure the impact on the economy. The importance of SMEs for the economies and their contribution to growth increased the interest of studying in detail patterns, trends and factors contributing to their productivity and growth. Internet application on SMEs contributes to growth, productivity and internalization of companies.The recent coronavirus disease (Covid19) pandemic is yet another evidence about the importance and ongoing increase on demand for boradband. It is not disputable that broadband increased the IT intensive sector and employability of IT experts. These shifts should be treated as signaling to policy and curricula changes in order to address the mismatch from graduates and labor market needs.Studying the time span (short-term vs. long-term) impact of broadband on the economy is a challenge that remains for future research. Firms specific factors that contribute to increasing productivity result as determinants of firms having internet broadband. The hypothesis being tested is that productivity SME indicators‘ variables are positively correlated with the probability to have a fast internet broadband. Being competitive means having the right information on time. The underlined hypothesis is based on the fact that the web and internet can not be considered as a medium only but also as a new economy The empirical evidence provided is on estimates from a sample of 360 SME from The Business Environment and Enterprise Performance Survey.A logit model is estimated and results that productivity SME indicators‘ are positively correlated with the probability to have a fast internet broadband. Companies that introduce a new product have 21.5% higher probability to have a high speed broadband than enterprises that do not introduce a new product, holding other covariates constant.The empirical evidence suggest that having a quality certification, and introducing a new product increase the probability to have a internet broadband; also sales have positive impact on the probability to have a internet broadband. Future research may undertake comparison of broadband diffusion controlling for country specific factors and controlling for size of firms. Another challenge that remains on empirical grounds is to quantify the effects of broadband on growth. Last but most importand it will remain a challenge to measure how IT knowledge had impact on the success and failure to different sectors during coronavirus disease (Covid19) pandemic.

• Details
• Contents