Quotation Briglauer, Wolfgang, Dürr, Niklas, Falck, Oliver, Hüschelrath, Kai. 2019. Does State Aid for Broadband Deployment in Rural Areas Close the Digital and Economic Divide? Information Economics and Policy. 46 68-85.




We evaluate the impact of a major European state aid programme for speed upgrades in broadband internet availability applied to rural areas in the German state of Bavaria throughout 2010 and 2011. We use a matched difference-in-differences estimation strategy that compares treated and untreated municipalities that are balanced with respect to funding criteria. We find that aided municipalities have a significantly higher broadband coverage at higher speed than non-aided municipalities. This increase in broadband coverage does not, on average, benefit the local population in terms of increase in local jobs per resident or wages. However, these effects are heterogeneous across skill groups. Furthermore, we find positive effects on the employment rate among residents. Taking these results together suggests that an increase in broadband coverage through state aid protects rural areas from depopulation (while residents work at other locations), but does not contribute to a further closing of the economic divide in the form of creating new jobs.


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Publication's profile

Status of publication Published
Affiliation External
Type of publication Journal article
Journal Information Economics and Policy
Citation Index SSCI
WU-Journal-Rating new VW-D
Language English
Title Does State Aid for Broadband Deployment in Rural Areas Close the Digital and Economic Divide?
Volume 46
Year 2019
Page from 68
Page to 85
Reviewed? Y
DOI https://doi.org/10.1016/j.infoecopol.2019.01.001
Open Access N


Briglauer, Wolfgang (Details)
Dürr, Niklas (ZEW Mannheim, Germany)
Falck, Oliver (ifo München, Germany)
Hüschelrath, Kai (ZEW Mannheim, Germany)
Research Institute for Regulatory Economics FI (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5341 Economic policy (Details)
5370 Industrial economics (Details)
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