Article

The Need for Speed: Impacts of Internet Connectivity on Firm Productivity

Authors:
To read the full-text of this research, you can request a copy directly from the authors.

Abstract

Fast internet access is widely considered to be a productivity-enhancing factor. Internet access speeds vary regionally within countries and even within cities. Despite articulate pleas for network upgrades to accelerate internet access, there is little rigorous research quantifying benefits to individual firms that arise from upgraded internet connectivity. We use a large New Zealand micro-survey of firms linked to unit record firm financial data to determine the impact that differing types of internet access have on firm productivity. Propensity score matching is used to control for factors, including the firm’s (lagged) productivity, that determine firms’ internet access choices. Having matched firms, we examine the productivity impacts that arise when a firm adopts different types (speeds) of internet connectivity. Broadband adoption is found to boost productivity but we find no productivity differences across broadband type. The results provide the first firm-level estimates internationally of the degree of productivity gains sourced from upgraded internet access.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... In order to provide clear economic political framework conditions, objective standards for the level of digitization are needed. Although there is a strict consensus in literature that digitization has positive effects on economic growth, productivity and welfare (Qiang & Rossotto, 2009, Czernich et al., 2011), firm level evidence on digitization points out that it does not by itself transform a firm from being a poor performer to a top performer within its sector (Grimes et al., 2011). The same holds true for national economies. ...
... The digitization index for Europe 27 increased at a compound annual growth rate (CAGR) of 5.16 percent (Katz, Koutroumpis 2014). The highest growth rate at the sub-component level was shown by the indicator speed (Grimes et al., 2011) (16.84 percent of CAGR) which measures the international internet bandwidth and broadband speeds offered to users. This growth of the speed respective capacity makes the growth of the omnipresence / network access (6.44percent CAGR) appears relatively small. ...
Article
Today, online technology such as broadband connectivity, wireless mobility, cloud computing, e-commerce, social media, and sensors are quickly transforming the world – creating new and innovative ways to work, play, consume, interact and communicate. These activities comprise the digitization process – pervasive adoption of a wide variety of digital, real time, and net-worked technologies, that enable people, companies, and governments, and even machines to stay connected to another. Since the level of digitization and its socio-political consequences vary from nation to nation a digitization performance index is being developed to offer starting points which enable politicians and governments to steer the digitization processes.
... 38 • no. 2 • 697-722 Besides the effects on the aggregate level, ICT also has a positive impact on the micro level. Grimes et al. (2012) found that broadband adoption boosted firm productivity by 7-10 percent. Majumdar et al. (2009) also found a positive statistically significant correlation between the level of broadband deployment and the productivity of firm deploying broadband technology. ...
Article
Full-text available
Digital transformation is increasingly affecting many aspects of the world economy. It is boosting economic growth, has an impact on foreign direct investments and increases international trade. Hence, the aim of the paper is to analyse digital transformation in relation with the economic cooperation between Western Balkan economies. In order to do so, we construct two indicators: the harmonised index of economic cooperation among Western Balkan economies and the indicator of digital transformation convergence. The results indicate a rising trend of economic cooperation amongst Western Balkan countries, with cooperation dominated by foreign trade. Even though Western Balkan countries have experienced an increased digital transformation convergence, they are still lagging behind the EU in the use of digital technologies. Hence, placing more emphasis on digital transformation could potentially boost the region's GDP and thus economic cooperation among them.
... Two HD TV streams and plenty of surfing fit easily into 12 megabits (Burstein, 2017)," and " [t]here aren't any common apps that require 25 Mbps (Singer, 2017)." Empirical evidence on the broad economic impacts of "speed" is scarce and does not address the issue as directly as I do here (Grimes, Ren, & Stephens, 2012;Kenny & Kenny, 2011;Rohman & Bohlin, 2012). Whether there is an "economic payoff" from higher speeds is interesting and policy-relevant, but the question remains largely unanswered. ...
... A second mechanism that rationalizes why broadband Internet adoption reallocates jobs from manufactures to services is its impact on labor productivity and skill complementarity. Grimes et al. (2012) use data from New Zealand and find positive impact of broadband adoption on labor productivity, contrary to Bertschek et al. (2013) who find no significant impact using data from Germany. However, Bertschek et al. (2016) point out a positive impact of mobile Internet access on labor productivity. ...
... 关于互联网产业生产率国内外已经有大量的学者做了实证研究,在这一领域已经产生了丰厚的学术 成果。互联网因具有打破信息不对称(Gupta, 1997;Hibbard et al.,1998) [1] [2]、知识共享( Nonaka et al., 1995;Kodama, 1999) [3] [4]、 降低交易成本( Hameri et al., 1997) [5]、 和提升劳动生产率( Kafouros, 2005;Hsu et al, 2014) [6] [7]的特点,正发展成为企业大众创新的重要平台( Zhu et al., 2006) [8]。使用互联网可以在 研究与开发阶段提高了研发效率和便于交叉合作,一些实证研究表明互联网对研究效率和研发企业之间 的合作均有积极影响( Howe et al., 2000;Forman et al., 2010;Bertschek et al., 2011) et al. 2002et al. , Grimes et al., 2009Majumdar et al., 2009) ...
... At the industry level, firms tend to be more efficient when they use ICTs and the Internet because the improved access to information and better connectivity allow for more interaction among all market players. The Internet leads to more intense data and information flows, creates better and faster matching processes and consequently results in a higher rate of aggregated technology growth (Brynjolfsson, 2003; OECD, 2008 and 2010a; Grimes and Ren, 2009; Majumdar et al., 2009; Forman and van Zeebroeck, 2010; Bertschek et al., 2011) The general impact that ICTs and the Internet have on firms is reflected in the changes of skills firms need from workers. Several studies examine the impact that the IT technical change has on skills demanded on the labour market. ...
Article
Full-text available
Both generic and specialised ICT skills are becoming an important requirement for employment across the economy as the Internet becomes more engrained in work processes, but a significant part of the population lacks the basic skills necessary to function in this new environment. This paper examines the impact of the Internet on the labour market in this context. For example, between 7% and 27% of adults have no experience in using computers or lack the most elementary computer skills, such as the ability to use a mouse. In addition, the groups with the least ICT skills tend to be among the demographic groups at the most risk of losing jobs. Data also highlight a potential skills mismatch among those with the strongest ICT skills (youth) and those who actually use them at work (prime age and older adults).
... Substantial deployment of fibre-based networks has also been occurring in countries such as the United States, the Netherlands, Finland and Denmark. Fuelled by concerns about maintaining future international competitiveness (in particular in relation to increasingly important Asian markets where fibre is already widely deployed) both the Australian and New Zealand governments have pledged to invest substantial sums into the construction of nationwide fast FTTH broadband networks (Grimes, Ren & Stevens, 2009). In both countries it is envisaged that connections delivering 100Mbps both downloading from and uploading to the internet will be available to the majority of households within ten years 1 . ...
Article
This non-technical ‘think-piece’ examines aspects of infrastructure project evaluation, concentrating on circumstances that may render a standard cost benefit analysis (CBA) inappropriate. It is designed to make infrastructure investors and planners think deeply about their assumptions and to broaden the range of issues that are taken into account. Issues considered include: the role of CBA; network effects (increasing returns to scale) and the endogeneity of resources within an economy; the valuation of productive versus consumptive benefits; the value of traded versus non-traded sector production; the role and choice of the discount rate; and the importance of considering option values when making infrastructure investment and disinvestment decisions.
Article
Land cover and use are critical for climate change, water quality and use, biodiversity and soil conservation as well as important drivers of rural economic activity and the evolution of rural communities. The Land Use in Rural New Zealand (LURNZ) model is a simulation model that predicts overall shifts in land use at a national scale and then allocates those changes spatially. We create a new dataset that allows us to consider fine scale land cover and use on private rural land and land characteristics associated with those land covers and uses. Second, we produce some summary statistics on the land cover transitions that were observed from 1996 to 2002. We find some evidence that supports our simple model of the relationship between land use changes and observable land quality, and the use of Land Use Capability and slope in rules to simulate the location of changes in land use and cover and also identify some directions for future work.
Article
In this paper we link unique data on local social infrastructure expenditure with micro-level individual survey data of self-reported social capital measures of trust and participation in community activities. We use both probit and tobit models to estimate the impact of social infrastructure expenditure on social capital formation. Our results imply that the links between social capital, demographic characteristics, human capital, geography and public social infrastructure investment are rather more subtle and complex than much of the literature implies. While we find evidence in support of many of the hypothesized relationships discussed in the social capital literature, our results also suggest that the impact of public social infrastructure investment is affected by both selection effects and free rider processes.
Article
As part of international climate change policy, voluntary opt-in programs to reduce emissions in unregulated sectors or countries have spurred considerable discussion. Since any regulator will make errors in predicting baselines, adverse selection will reduce efficiency since participants will self-select into the program. In contrast, pure subsidies lead to full participation but require large financial transfers; this is a particular challenge across countries. A global social planner facing costless transfers would choose such a subsidy to maximize efficiency. However, any actual policy needs to be individually rational for both the buying (industrialized) and selling (developing) country. We present a simple model to analyze this trade-off between adverse selection and infra-marginal transfers. The model leads to the following findings. First, extending the scale of voluntary programs both improves efficiency and reduces transfers. Second, the set of individually rational and Pareto efficient policies typically features a combination of credit discounting and stringent assigned baselines which reduce efficiency. Third, if the industrialized countries can be persuaded to be more generous, the feasible policy set can come close to the globally efficient policy to avoid deforestation..
Article
House price trends in each of New Zealand and Australia are frequently discussed as national level developments. Sub-national developments are also important, especially where regions display idiosyncratic trends driven either by demand factors (differential income patterns) or by supply factors (geographical or regulatory restrictions). At a broader scale, it is possible that the New Zealand housing market, or a specific regional housing market (e.g. Auckland), is part of a broader Australasian housing market. If this were the case, New Zealand house prices would converge to a broadly stable ratio of house prices in Australia. One reason this could occur is if international macroeconomic and asset price trends dominate housing market outcomes. New Zealand authorities may then be relatively powerless to control the major real determinants of house prices through regulatory or other policies. We extract the major drivers of house prices at regional levels within New Zealand and Australia to examine the degree of differentiation across regional housing markets. While some minor regional differences are apparent, the evidence points to the dominance of a single trans-Tasman housing trend.
Article
When agricultural emissions are included in the New Zealand Emission Trading System (ETS) the economics of farming will be significantly altered. Under the legislation current in October 2009, in the early years of the system the agricultural sector as a whole would have received NZ units equivalent to 90% of 2005 emissions to ease the transition. Amendments to the Bill passed in November have delayed the start date from 2013 to 2015 and extended the protection even further. This paper addresses one of the key issues for making an agricultural emissions trading system a success: how to use the allocation of NZ units to achieve equitable and acceptable cost sharing and a smoother transition. We first discuss the potential motivations for free allocation and the two extreme potential allocation options that could be associated with the two key motivations. The option finally chosen is likely to be somewhere between these two extremes. Empirical studies can inform assessment of options. Previous empirical studies have addressed a variety of questions, including what the economic impact of the system is and on whom, how much leakage is there likely to be, and what might be the adjustment costs. We discuss each of these, comparing different existing studies and addressing some current gaps in our understanding and knowledge with new empirical work on farm level impacts and on likely responses to the ETS. We conclude by laying out some key options for allocation design and drawing links between these and the empirical material.
Article
This paper uses data from the Survey of Family, Income and Employment (SoFIE) to estimate household saving in New Zealand between 2004-2006. Comprehensive data on wealth is collected biannually in SoFIE and we calculate household saving by examining how wealth has changed over time. We find that even the most conservative estimate of household saving was at least 14% of gross income during this time period. On the other hand, the indirectly derived Household Income and Outlay Accounts (HIOA) indicate (net) household saving was -12.5% per year over the same period. We also find no evidence that capital gains in housing during this time period crowded out saving or that the composition of household wealth in New Zealand differed from that in other developed countries.
Article
Although much work has been done analysing the possible causes of the New Zealand-Australian income gap, to date there has been little analysis of the extent to which this gap differs by gender and age. Using New Zealand and Australian employment and census data we examine these differences and find that (1) over the last 25 years the incomes of New Zealand women have declined less rapidly than those of New Zealand men, relative to Australian incomes; (2) this poor relative performance of New Zealand males was felt most by those in middle age; and (3) the stronger relative income growth of New Zealand females appears to be largely driven by increased public sector wage growth, and as such, its long term sustainability is questionable.
Article
Full-text available
This paper examines the uncovered interest parity hypothesis using the dollar-sterling exchange rate during the gold standard era. This period is interesting because the exchange rate was seasonal, because transactions costs were high, and because occasions when uncovered interest rate speculation did not occur can be identified. The paper shows UIP speculation frequently did not occur, that speculation occurred more in response to expected exchange rate changes than interest rate differentials, and that profitability varied systematically with interest rate differentials. The estimated UIP equations are substantially improved by distinguishing occasions when sterling was borrowed not lent.
Article
Full-text available
In this article, we link unique data on local social infrastructure expenditure with microlevel individual survey data of self-reported social capital measures of trust and participation in community activities. We use both probit and tobit models to estimate the impact of social infrastructure expenditure on social capital formation. Our results imply that the links between social capital, demographic characteristics, human capital, geography, and public social infrastructure investment are rather more subtle and complex than much of the literature implies. While we find evidence in support of many of the hypothesized relationships discussed in the social capital literature, our results also suggest that the impact of public social infrastructure investment is affected by both selection effects and free rider processes.
Article
Does homeownership affect individual social capital and thereby influence local outcomes? Following DiPasquale and Glaeser, a body of literature suggests that homeownership is positively related to social capital formation. Homeowners have an incentive to engage in the local community in order to preserve or enhance the value of their housing asset. Moreover, homeownership creates barriers to geographic mobility, which increases the present value of the expected stream of benefits from local community social capital. We test the homeownership hypothesis alongside other individual, household and locational determinants of social capital using unique data created by merging the 2006 and 2008 samples of the New Zealand Quality of Life survey. The measures of social capital used in our analysis include trust in others, participation in social networks, attitude towards local governance and sense of community. Since homeownership is not randomly assigned, we complement our regression models with propensity score matching to control for selection effects. The results confirm that homeownership exerts considerable positive impact in the formation of social capital in New Zealand communities. In raising accountability of local government it does, however, lead to reduced satisfaction by homeowners in the performance of local councils.
Preprint
Full-text available
Internet maturity levels of the countries have become an interest point for researchers. However, advanced statistical techniques such as principal components are not employed in those studies. Current study reduces 17 Internet maturity indicators determined by OECD into 5 main components and applies cluster analysis according those components. Hierarchical cluster obtained by the procedure showed that 1) economically developed and developing countries are grouped into separate clusters, 2) Internet maturity indicators result in similar classification to economic classification, 3) cost of Internet access is an important factor to assign developed and developing countries into different clusters, 4) the results are compatible with the existing Internet maturity rankings developed by research companies.
Article
Full-text available
This research takes a closer look at the effects of climate change on New Zealand agriculture and on the wider economy, including indirect international effects such as changes in the prices of goods exported from and imported to New Zealand, as well as carbon prices and policies. Economic loss from short term catastrophic events such floods and landslides is not investigated. Infometrics (2007) presented an initial quantitative analysis of some of the above issues. In this paper they update the part of that report that looked at the effect of climate change on agricultural commodity prices, by considering some new scenarios based on international research since 2007, and expand the time-period from 2025 to 2070.
Article
Innovation drives economic competitiveness and sustained long-term economic growth. Especially the emergence and intensive utilization of information and communication technologies (ICTs), which spawned the beginning of the digital economy two decades ago, heavily affected the opportunities and efficiency of how firms produce and provide goods and services. We provide an overview of the empirical literature on ICT and productivity and highlight the main results and methodological differences. The majority of studies indicates that the productivity effect of ICT is indeed positive and significant. However, methodological approaches of how to appropriately estimate the ICT effect matter. While aggregate and sectoral growth accounting exercises suggest stronger differences of the ICT effect between US and Europe, firm-level analyses suggest no significant country differences. Moreover, we shed light on the notion of ICT being a General Propose Technology (GPT) enabling further innovations. Most of the GPT evidence on ICT is found for the US, while evidence for European countries is harder to come by. However, more theoretical and empirical research is needed to better understand spillovers and externalities of ICT and how these technologies transform our economies.
Chapter
The locational decisions of large enterprises are a far more complex issue than would appear at first glance. One would naturally assume that large enterprises would want to be located in our largest cities.
Article
Depuis près de 15 ans, les pouvoirs publics déploient internet dans les territoires ruraux qui, faute de rentabilité, sont délaissés par les opérateurs privés. Ces investissements publics sont motivés par une volonté d’assurer l’équité territoriale mais aussi de stimuler l’attractivité économique de ces territoires. Afin d’analyser l’efficacité de ces politiques sur ce deuxième objectif, ce travail évalue l’impact des premières années du programme « Auvergne Très Haut Débit » sur la création d’entreprises dans les territoires peu denses. Nos estimations (en double différence avec appariement préalable) indiquent que le déploiement du très haut débit a stimulé la création d’entreprises dans trois groupes de secteurs : la restauration et l’hébergement ; l’administration publique, l’enseignement, la santé humaine et l’action sociale ; et les autres activités de services. Des effets négatifs ont en revanche été identifiés dans le secteur de l’immobilier. Ces effets sont à l’œuvre dans les communes bien dotées en aménités naturelles ou ayant bénéficié d’un déploiement significatif du très haut débit.
Article
Full-text available
The paper decomposes GDP both in terms of level per capita and growth rate, so as to identify the sources of income differences and of economic growth for all EU27 member states. This accounting approach has multiple advantages, although a number of substantial caveats should be borne in mind when interpreting the results. In particular, the detailed accounting approach helps distinguish exogenous from policy-influenced growth drivers. The combination of lower per-hour productivity and lower labour utilisation is the cause of relatively low per capita GDP in euro area and EU15 countries, while weak productivity remains the main concern in the new member states. GDP growth rate has been broken down into 12 items, including an indicator of labour quality, based upon the composition of employment by educational attainment.
Article
Full-text available
The propensity score is the conditional probability of assignment to a particular treatment given a vector of observed covariates. Both large and small sample theory show that adjustment for the scalar propensity score is sufficient to remove bias due to all observed covariates. Applications include: (i) matched sampling on the univariate propensity score, which is a generalization of discriminant matching, (ii) multivariate adjustment by subclassification on the propensity score where the same subclasses are used to estimate treatment effects for all outcome variables and in all subpopulations, and (iii) visual representation of multivariate covariance adjustment by a two- dimensional plot.
Article
Full-text available
High-speed internet access has developed rapidly in the last decade and is increasingly viewed as essential infrastructure for our global information economy.2 For example, as recently as mid-2000 there were only 4.1 million broadband lines in the United States and only 3.2 million of these were residential lines.3 Thus, in mid-2000 less than one household in thirty could access the internet at a download speed of 200 kbps or greater. Six years later, the number of broadband lines, excluding mobile wireless connections, had soared to more than 53.5 million, 49 million of which were in residences. Residential penetration had therefore risen to nearly 50 percent by the middle of last year. (If mobile wireless connections are included, total U.S. broadband lines had risen to more than 64.6 million lines.) While most communications sector analysts concur that the ability to deliver broadband communications is a critical feature of the modern global communications infrastructure, there is limited recent empirical research on the economic effects of broadband. In particular, much of the available research is now several years old or refers to the benefits of the Internet generally or more broadly of the "digital economy" rather than to the broadband telecommunications infrastructure per se.4
Article
Full-text available
This paper clarifies how the benefits and costs of water quality improvements in Lake Rotorua are likely to be shared in the absence of a trading system; presents different perspectives on and principles for deciding how costs should be allocated; and then shows how different options for initially allocating nutrient allowances and achieving reductions in the cap over time conform with those cost-sharing principles. There is no ‘correct’ answer to the question of who should pay. The ‘best’ answer for Lake Rotorua will depend on what the community thinks is fair and what will be politically feasible. If the trading market does not operate efficiently, the way that allowances are allocated will affect the efficiency with which the catchment achieves its environmental goal. If the allocation of allowances provides significant capital it could also affect economic behaviour by loosening capital constraints that limit land development and mitigation.
Article
Full-text available
This paper develops a simple model that captures the essential features of the supply and demand for housing, and which is used to evaluate the impact of a range of policy interventions. The model incorporates functions describing the demand to rent or purchase housing, a function describing the supply of rental housing, and a function describing the supply of new houses. The model is used to explore the effects on prices, quantities, and owner occupancy (homeownership) rates of policies that change the stock of housing, that alter the taxes and subsidies facing landlords and homeowners, that alter the cost of new housing, and that alter real interest rates. The results suggest that despite the widespread attention owner occupancy rates have attracted, they are not a particularly helpful guide to the state of the housing market. Typically they are quite insensitive to policy interventions, a result that follows from the integrated view of both the rental and ownership market, adopted in this study.
Article
Full-text available
This paper uses data from the 1996, 2001 and 2006 New Zealand Census to examine how the supply of immigrants in particular skill-groups affects the employment and wages of the New Zealand-born and of earlier migrants. We first estimate simple CES production functions that allow for substitutability between workers from different skill-groups, but assume that, within skill-groups, migrants are perfect substitutes for non-migrants. We next estimate hierarchical CES production functions that allow for substitutability between immigrant and non-immigrant workers within skillgroups, but constrain the patterns of wage impacts on different factors in response to changing factor shares, and that natives and migrants are not substitutable across skill-groups. Then, we extend the previous literature by estimating a Generalised Leontief production function that allows for a less restrictive relationship between changes in factors shares and changes in wages within a particular level of the production function and for substitution and complementarity between immigrant and nonimmigrant workers both between and across skill-groups. Regardless of the model being estimated, we find little evidence that immigrants negatively affect either the wages or employment opportunities of the average New Zealand-born worker. However, we find some evidence that increases in the number of high-skilled recent migrants have small negative impacts on the wages of high-skilled New Zealand-born workers, which are offset by small positive impacts on the wages of medium-skilled New Zealanders.
Article
Full-text available
This paper uses data from the 1997–2007 New Zealand Income Survey to examine the economic performance of immigrants in New Zealand. Specifically, we use a synthetic cohort approach to examine how employment rates, hourly wages, annual income and occupations for immigrants compare to those for the NZ-born. We estimate the time pattern of adaptation in a semi-parametric manner for immigrants from different birth regions and with different qualifications. We also examine the possible impact of immigrants getting different returns to qualifications. The pattern of entry disadvantage followed by subsequent relative improvement is more pronounced for employment rates than for wage rates or occupational rank. It is also more pronounced for immigrants born in Asia. Outcomes for immigrants from the Pacific Islands never catch up with the NZ-born.
Article
Full-text available
This paper develops a model of the housing market incorporating a construction sector, a rental sector, and a housing demand sector to examine the long term consequences for the housing market of different types of capital gains taxes. The sector is based on an overlapping generations model of the economy that included a detailed representation of the credit constraints and tax regulations affecting households. The model suggests that capital gains taxes will raise rents, increase homeownership rates, rebalance the housing stock towards smaller houses, and increase the net foreign asset position. The implications for welfare are much less clear, however, particularly for young low income households that will face higher rents.
Article
Full-text available
When small towns experience a major infrastructure shock, such as a ‘mill’ closure, the effects can be devastating. We analyse the effects of two major freezing works closures in New Zealand, in Patea (1982) and Whakatu (1986). These two examples provide an interesting comparison: Whakatu is located close to a city, while Patea is relatively isolated. We describe the impacts of these shocks on population, employment and house values in each town, relative to two sets of comparators. These descriptions allow us to contrast long-run trends and adjustment dynamics resulting from the differing locations of both towns. We find that both towns experience negative population and employment impacts; however, consistent with benefits of a near-city location, the effects on Whakatu are mainly temporary, whereas the effects on Patea are more permanent. Population age-groups respond very differently to the shocks, in ways that are consistent with homeownership being a factor stifling migration responsiveness in the face of a shock. The results have implications for regional development policy choices with respect to infrastructure location and also for programmes designed to stimulate homeownership.
Article
Full-text available
The labor productivity effects of portability and connectivity of information and communication technology (ICT) are studied with Finnish firm-level data. It is found that a computer with only processing and storage capabilities boosts labor productivity by 9% (corresponding to 5% output elasticity), portability by 32%, wireline connectivity by 14%, and wireless connectivity by 6%. The findings are in line with previous literature and comparisons to ICT costs suggest that firms equate marginal costs and returns. Although increasing ICT penetration can no longer be a major source of productivity growth in developed economies, the relatively new characteristics studied can.
Article
Full-text available
How much economic value did the diffusion of broadband create? We provide benchmark estimates for 1999 to 2006. We observe $39 billion of total revenue in Internet access in 2006, with broadband accounting for $28 billion of this total. Depending on the estimate, households generated $20 to $22 billion of the broadband revenue. Approximately $8.3 to $10.6 billion was additional revenue created between 1999 and 2006. That replacement is associated with $4.8 to $6.7 billion in consumer surplus, which is not measured via Gross Domestic Product (GDP). An Internet-access Consumer Price Index (CPI) would have to decline by 1.6% to 2.2% per year for it to reflect the creation of value. These estimates both differ substantially from those typically quoted in Washington policy discussions, and they shed light on several broadband policy issues, such as why relying on private investment worked to diffuse broadband in many US urban locations at the start of the millennium.
Article
Full-text available
Did the diffusion of the Internet lead to convergence or divergence of local wages? We examine the relationship between business use of advanced Internet technology and regional variation in US wage growth between 1995 and 2000.We show that business use of advanced Internet technology is associated with wage growth but find no evidence that the Internet contributed to regional wage convergence. Advanced Internet technology is only associated with wage growth in places that were already well off in terms of income, education, population, and industry. Overall, advanced Internet explains one-quarter of the difference in wage growth between these counties and all others.
Article
Full-text available
This paper develops an overlapping generations model incorporating credit constraints, owner-occupier and rental sectors, and detailed tax regulations to examine how the interaction of inflation and the tax system affect the housing market. It shows that even modest rates of inflation can have very large effects on the home-ownership rates of young households, particularly at low real interest rates. This occurs even if there is a large supply response in the quantity of housing. The model suggests that the welfare costs of inflation could be ameliorated by exempting the inflation component of interest payments from income tax.
Article
Full-text available
Commodities are often stored when the spot price exceeds the future price in a central market. Wright and Williams conjectured that inventories are held in locations far from the central market on these occasions. In these locations the spot price is lower than the price for forward delivery because transport costs are temporarily high. This hypothesis has not been directly tested, because prices for forward delivery are not normally available at non-central locations. This paper uses an example where these prices exist to test the hypothesis. The evidence, from the late nineteenth century corn markets in Chicago and New York, strongly supports the conjecture. Length: 30 pages
Article
Full-text available
Many studies show that individuals from ethnic minority groups receive low levels of job-related training, raising the question of whether lower expected wage benefits contribute to this lack of training. In this paper, unit record data are used to examine the effect of job- related training on wages in New Zealand. The results suggest that both the receipt of employer-provided training, and the number of training events, have larger effects on wages for minority workers than they do for white workers. There are no differences across ethnic groups in the wage benefits from other types of training.
Article
Full-text available
We examine trend economic developments in New Zealand and in each of Australia’s six states and two territories (i.e. nine regions) in order to inform issues regarding economic policy harmonisation across Australasia. Our focus is on trend developments in GDP, population, GDP per capita and employment (each at regional level), and in sectoral industry shares within each region. By comparing New Zealand developments with those in the eight Australian regions, we infer whether New Zealand’s developments have been typical of those experienced elsewhere in Australasia. Examination of development trends also indicates the nature of the development process across Australasian regions. For instance, we examine the extent to which certain regions are experiencing growth in high-value industries (such as business and financial services), and examine the degree to which some are dependent on primary industries, including agriculture and mining. Analysis of all the data indicates that, while New Zealand has some idiosyncratic features, it is reasonable to regard it as a “typical” Australasian economy in many respects.
Article
Full-text available
This paper examines the relative size of the effects of New Zealand monetary policy and macroeconomic data surprises on the spot exchange rate, 2 and 5 year swap rate differentials, and the synthetic forward exchange rate schedule. We find that the spot exchange rate and 5 year swap rates respond by a similar magnitude to monetary surprises, implying there is little response of the forward exchange rate to this type of news. In contrast, the spot exchange rate responds by nearly three times as much as 5 year interest rates to CPI and GDP surprises, implying that forward rates appreciate to higher than expected CPI or GDP news. This is in contrast to standard theoretical models and US evidence. Lastly, we show that exchange rates but not interest rates respond to current account news. The implications of these results for monetary policy are considered. Classification-E50, J61, R21, R23
Article
Full-text available
We present a data oriented analysis of the effect of different kind of economic shocks on Chilean output growth and inflation over the last 40 years. Two important results are: (1) foreign shocks only explain 17% of the variability of the output growth in the period 1984-2006 whereas it used to account for the 47,2% of output variability in 1966-1983; (2) The participation of foreign shocks to explain the Chilean inflation reaction becomes more importan in the last twienty years because of the price liberalization and Chile's openness to international trade. Results highlight specific features of the Chilean economy not present in other countries.
Article
Full-text available
This paper analyses the effect of inflation on the measurement of saving and housing affordability in New Zealand. When the inflation rate is positive, the income and saving of lenders is overstated and the saving of borrowers is understated because a portion of the interest earnings on capital are not true earnings but merely compensation for inflation. Because New Zealand has a large international debt position, this distortion means aggregate saving is understated, possibly by 2 percent of gross domestic product per year. In addition, a standard measure of the cost of financing the purchase of a house is overstated by approximately fifty percent, as a large part of mortgage payments are actually saving. Nevertheless, at the end of 2007 the cost of financing house purchase in New Zealand was at a cyclical high, approximately 40 percent higher than its average level since 1990.
Article
In this Paper, we assess the performance and efficiency of OECD countries with respect to broadband Internet subscription. Using the econometric technique of Stochastic Frontier Analysis, we estimate scores indicating the efficiency with which a country converts its economic and demographic endowments into broadband subscriptions. With very few exceptions, we find that broadband subscription in OECD countries is consistent with those endowments -- about two thirds of OECD countries have an efficiency rate of 95% or better. Significantly, the United States has an efficiency index of 96.7%, which is slightly higher than Japan (96.3%) and Korea (95.8%). Consistent with earlier research, we find that economic and demographic endowments explain nearly all of the variation in broadband subscriptions (91%). This finding suggests that public policy's role for broadband adoption may be more effective if it is targeted at improving or mitigating the adverse effects of those underlying demographic and economic conditions, such as computer ownership and education programs. Finally, because countries have different demographic and economic conditions, the most effective mix of policies will vary from country-to-country. As such, our findings indicate that blindly following the policies of countries "ranked" higher in the OECD raw rankings is not likely to result in optimal success.
Article
This paper analyses the relationship between firms’ multi-factor productivity and the effective employment density of the areas where they operate. Quantifying these agglomeration elasticities is of central importance in the evaluation of the wider economic benefits of transport investments. We estimate agglomeration elasticities using the Statistics New Zealand prototype Longitudinal Business Database: a firm-level panel covering the period 1999 to 2006. We estimate that an area with 10 percent higher effective density has firms with productivity that is 0.69 percent higher, once we control for the industry specific production functions and sorting of more productive firms across industries and locations. We present separate estimates of agglomeration elasticities for specific industries and regions, and examine the interaction of agglomeration with capital, labour, and other inputs.
Article
Land prices within monocentric cities typically decline from the centre to the urban periphery. More complex patterns are observed in polycentric and coastal cities; discrete jumps in value can occur across zoning boundaries. Information on these patterns within Auckland is important to understand: (a) the nature of Auckland's development, including the impact of infrastructure investments; and (b) the effects of regulation in causing discrete land valuation changes. One such regulation in Auckland is the metropolitan urban limit (MUL); we specifically examine whether the existence of this growth limit affects land prices. We do so in the context of a model of all Auckland land values over a twelve-year period, finding a strong zoning boundary effect on land prices.
Article
This paper focuses on migration between Australia and New Zealand, which has exhibited a strong, but cyclical, net movement towards Australia since the late 1960s. A long-term historical perspective is taken. Trans-Tasman migration is also compared with inter-island migration within New Zealand. It is argued that differential economic development, driven by forces of globalisation, agglomeration and technological change, has been primarily responsible for the long-run changes in the distribution of population across the regions of Australasia. Asynchronous business cycles, demographic dynamics, perceptions, return migration and the high international mobility of New Zealanders (of whom one quarter of those aged 40-64 have lived abroad for a year or longer) are responsible for the short-run fluctuations. However, permanent and long-term migration is only a small fraction of total trans-Tasman population movement. Moreover, trans-Tasman migration has not offset New Zealand’s ability to recruit population through immigration. Over the last three decades, the outflow of half a million New Zealand citizens has been compensated by a net inflow of three-quarter million citizens from elsewhere. The number of New Zealanders in Australia is expected to continue to grow but the migration flows become increasingly diversified. One-third of the New Zealanders in Australia re-migrates within four years. Future trends will depend on New Zealand’s ability to boost productivity growth, the real cost of air travel, retirement migration and the impacts of climate change.
Article
New Zealand underwent a period of comprehensive market-oriented economic reforms from 1984 to 1993. In this paper, we use data from the 1986, 1991, 1996 and 2001 New Zealand census to examine the long-run impact that these reforms had on local communities. We analyse the adjustment process in 140 local labour market areas by creating three measures of the impact of structural reform on local communities and examining the persistence of these shocks over time. We find that communities which experienced smaller employment shocks have higher employment rates and a more skilled workforce in the medium and long-term. Population shocks also have positive, sizeable and persistent effect on future population size. Overall, the initial impacts of the reforms undertaken in New Zealand on local communities appear to still endure more than a decade later.
Article
The propensity score is the conditional probability of assignment to a particular treatment given a vector of observed covariates. Both large and small sample theory show that adjustment for the scalar propensity score is sufficient to remove bias due to all observed covariates. Applications include: (i) matched sampling on the univariate propensity score, which is a generalization of discriminant matching, (ii) multivariate adjustment by subclassification on the propensity score where the same subclasses are used to estimate treatment effects for all outcome variables and in all subpopulations, and (iii) visual representation of multivariate covariance adjustment by a two-dimensional plot.
Article
With its rapid economic growth, China's primary energy consumption has exceeded domestic energy production since 1994, leading to a substantial expansion in energy imports, particularly of oil. China's energy demand has an increasingly significant impact on global energy markets. In this paper Allen partial elasticities of factor and energy substitution, and price elasticities of energy demand, are calculated for China using a two-stage translog cost function approach. The results suggest that energy is substitutable with both capital and labor. Coal is significantly substitutable with electricity and complementary with diesel while gasoline and electricity are substitutable with diesel. China's energy intensity is increasing during the study period (1995–2004) and the major driver appears to be due to the increased use of energy-intensive technology.
Article
We examine the determinants of forced insolvency in New Zealand. The study incorporates three key features. First, we use regional as well as national data. Second, we analyse the role of property prices, which influence collateral values. Third, we explain the rate of total forced insolvency including personal bankruptcies and involuntary company liquidations. Insolvencies are explained by economic activity, financial variables and collateral values. The interactions between economic activity, leverage and property price (collateral) shocks indicate that region-specific shocks can compound into significant localised economic cycles.
Article
If two countries experience similar cycles, loss in monetary sovereignty following currency union may not be severe. Analysis of cyclical similarity is frequently carried out at the overall industry level, then interpreted with reference to regional industrial structures. By contrast, this paper explicitly incorporates regional industry structure into an examination of Australasian cycles. Since 1991, NZ and Australasian cycles have been highly correlated, but there is little evidence that the NZ cycle has been “caused” by Australian regional or industry cycles. We test whether the NZDAUD exchange rate has insulated NZ from Australian shocks, but find it has not played a major buffering role in response to Australian industry shocks (including mining shocks). Instead, the strongest impacts on the NZDAUD stem from the NZ cycle. An important loss of monetary sovereignty under currency union may therefore arise in response to NZ-specific shocks.
Article
Land taxes are known to be amongst the most efficient forms of taxation since land is an immobile factor; property (capital value) taxes are less efficient owing to the tax on improvements. However there is little international (or New Zealand) evidence regarding the distributional impacts of land and property taxes. Nor is there much New Zealand evidence on their potential fiscal implications or about the taxes’ impacts on asset values and debt positions. We explore impacts that may arise from a range of land and property taxes that differ across certain features (e.g. comprehensiveness and degree of grand-fathering). Both partial and general equilibrium models are used. The results provide a basis for considering alternative taxation options involving land or property taxes.
Article
This paper uses the New Zealand Linked Income Supplement (LIS) to investigate the annual transitions in hourly earnings of working age individuals over the years 1997 to 2004. I first construct transition matrices for annual changes in weekly and hourly earnings, to enable comparison with previous analyses using New Zealand tax data. I then estimate the determinants of annual changes in hourly earnings using OLS and quantile regressions. Differences in human capital are associated with differences in the rate of earnings growth. The results were broadly similar across the sub-periods 1997-2001 and 2001-2004.
Article
This paper reports findings from a study of changes in Māori income levels and income dispersion between 1997 and 2003. Data from Statistics New Zealand's Income Survey are used to describe and evaluate the main changes in the Māori income distribution in this period, which was marked by substantial increases in employment rates and improvements in the skill levels of working-aged Māori. A parallel analysis of the main changes in the European/Pākehā income distribution is provided for comparative purposes. The results show significant reductions in the proportion of Māori with no weekly income in the reference week, or incomes of $150-200 a week, and significant increases in the proportion with incomes above the peak income level of approximately $550 per week. Income inequality within the total working-aged Māori population declined, while income inequality among employed Māori was stable. An analysis of some of the key factors contributing to change in the income distribution suggests that the transition of many Māori into employment during this period was the single most important driver of change.
Article
The New Zealand government introduced a Primary Health Care Strategy (PHCS) in 2001 aimed at improving access to primary health care, improving health, and reducing inequalities in health. The Strategy represented a substantive increase in health funding by government and a move from a targeted to a universal funding model. This paper uses representative national survey data to examine the distribution of fees paid for primary health care by different individuals under the mixed public-private financing model in place prior to the introduction of PHCS. Using multivariate regression analysis, we find that fees do vary, with people who might be expected to have greater needs paying less. However, apart from people with diabetes, there is no direct link between self-reported health status and fees paid. The findings indicate that a mixed public-private financing model can result in a fee structure which recognises differences across different population groups. The findings also provide a baseline against which changes in funding brought about by the PHCS can be evaluated.
Article
This paper uses valuation data from Quotable Value New Zealand to examine changes in the value of the rural land in New Zealand between 1989 and 2003. The value of rural land reflects the profitability of agriculture as well as the returns to alternative land uses, and has a large impact on the prosperity of rural areas. The paper highlights the importance of both changes in land use and changes in the value of land in different uses in explaining overall changes in land values. It also examines the relationship among productive characteristics of the land, the local climate, various local amenities, and changes in land values and land use to better understand what factors have been driving overall changes in the value of rural land across New Zealand. We find that the real value of rural land in all uses increased substantially over the years being examined. Land use in rural areas also changed considerably during this period, but these changes in land use were essentially uncorrelated with changes in land values. Our regression results indicate that rural land values increased the most in less populated areas with good climates and local amenities. Initial land use also plays an important role in explaining the variation in changes in rural land values with greater increases in land values found in areas with more land initially devoted to urban uses and commercial forestry, and less land initially devoted to horticulture and lifestyle uses.
Article
Housing is the most important component of wealth for many New Zealanders. Its location is fixed and its value is influenced by economic and other factors specific to that location. Hence when people live in owner-occupied homes their wealth is strongly associated with their local economic conditions. Housing is also a major factor in influencing migration decisions and, hence, regional mobility. To shed light on the behaviour of the New Zealand housing market, we examine the dynamic and long run responses of house values across spatial communities and across time to economic variables that impact on the local economy. We use a specially constructed QVNZ-sourced database for house prices and house sales, and a range of explanatory variables constructed consistently across TLA and Regional Council levels.
Article
Carbon sequestration in plantation forests provides the main means by which New Zealand will meet its international climate change obligations in the first commitment period of the Kyoto Protocol (2008–2012). However, without active policy, forests are unlikely to contribute as much in subsequent commitment periods. This research paper provides the background for examining policy measures for encouraging carbon sequestration in plantation forests in New Zealand. Part I focuses on providing factual information and positive analysis of: key domestic and international regulations; information on New Zealand forests, the forestry industry and forest profitability; discussion of land-use decision making, including the central question of what influences conversion of farmland to forestry; and forest carbon ecology. Part II moves on to normative analysis of policy design. It discusses how including considerations of the value of carbon sequestration and storage changes optimal land-use behaviour, and outlines key issues that need to be addressed when developing a policy to encourage sequestration and storage in a pragmatic way. Finally, the paper identifies a number of key areas where we need more information before we can make well- informed choices about policy design. Future work will endeavour to identify and evaluate policies that would effectively encourage sequestration.
Article
From 1974 through 1997 the Galapagos experienced very rapid population growth, around six per cent per year. Sustained at this level, the population would continue to double every 12 years. Increased population brings an increased risk of invasive introduced species, which endangers the fragile ecosystems. On 18 March 1998, a Special Law was passed to protect the Galapagos. This law severely limits migration to the islands. We discuss the environmental problems that motivated the law, describe the law, and discuss anecdotal evidence on its operation and potential to date. We then theoretically assess the implications of limiting migration and empirically assess the history and drivers of migration to Galapagos. In particular we discuss distorted incentives arising from subsidies and inadequate regulations that exacerbate migration pressure. Finally, we draw on our analysis to offer some short and longer term policy solutions and ideas on how existing capacity could be enhanced to implement them.
Article
This paper tackles the complex issue of how to include regenerating indigenous forest in a domestic carbon credit system. The paper specifically addresses New Zealand conditions but most of the issues and conclusions are relevant in any developed country with indigenous regrowth. The paper begins by defining the constraints that any sink policy must meet. I begin by discussing environmental integrity, and in particular measurement and monitoring, “human-induced” change, and permanence. I then outline the international rules as they stand and how these could be translated into domestic rules.
Article
This paper tackles the complex issue of how buyers and sellers within a domestic carbon credit system designed to include regenerating indigenous forest would optimally design contracts for trades of the new good, “carbon sink credits”. The paper begins by briefly defining the constraints that sink projects must meet. This implicitly shows the freedom we have in designing contracts. In the context of a simple numerical example I discuss the constraints that the market puts on contracts. In particular I consider the interests of the buyers and sellers, and how they can maximise and share gains through contract design. I outline the sources of risk and discuss who has advantages in dealing with these risks. The best contract designs impose the risk on those most able to address or absorb it. I illustrate the potential gains from sink contracts with a range of conditions and contracts.
Article
The New Zealand ITQ system is a dynamic institution that has had many refinements since its inception more than 15 years ago. Nonetheless, the basic tenets of the system - setting a total allowable catch and leaving the market to determine the most profitable allocation of fishing effort - have remained intact. This paper assesses the New Zealand system to identify areas of success and/or possible improvement or expansion within it. The reasons for doing so are to highlight beneficial features and to identify features of the New Zealand ITQ system that are relevant to other potential tradable permit markets. Beneficial features include simple standardized rules for quota definition and trading across species and areas; very few restrictions on quota trading and holding; relative stability in the rules over time; and low levels of government involvement in the trading process. We find evidence that supports the assertion that fishers behave in a reasonably rational fashion and that the markets are relatively efficient. We do not find major changes in participation in these fisheries as a result of the system. We find evidence that suggests that the ITQ system is improving the profitability of fisheries in New Zealand. In general the evidence thus far suggests that the market is operating in a reasonably efficient manner and is providing significant economic gains. These factors suggest that New Zealand would want to have non-economic justifications for any significant changes to the system.
Article
As tradeable permit programmes mature, two inter-related issues are becoming more critical in creating viable responses to a long-term, highly uncertain environmental problem such as climate change. First, we need to update policies in response to new information; and second, we need to design policies so that they can be updated without creating adverse strategic incentives for either government or regulated entities. Consideration of both exogenous risk (uncontrollable) and endogenous risk (concerns about policy credibility) suggests that permits should be auctioned several years in advance of use, and each permit should be defined as a percentage of a possibly varying target. For exogenous risks, this system allows all risk to be pooled and managed as efficiently as possible within the private sector. For endogenous risk, it creates a vested interest that will pressure government to maintain or strengthen targets to offset the obvious pressures to weaken regulation. It also reduces the ability of government to reallocate rents without cost to itself, or to gain revenue by altering targets. In addition, policy should be made as complete and as transparent as possible, and its key elements should be embedded in legislation to limit prospects for capricious changes in the future.
Article
We place regional industry structures at centre stage in currency union analysis, decomposing differences between regional and aggregate cycles into 'industry structure' and 'industry cycle' effects. The industry structure effect indicates whether a region's industry structure causes its cycle to deviate from the aggregate; the industry cycle effect indicates the importance of region-specific shocks in causing a deviation between cycles. We apply the methodology to Australasia. One region, ACT, has a material industry structure effect arising from its heavy central government concentration. No other region has a material industry structure effect; their cycles differ from the aggregate due to region-specific shocks.
Article
Deterministic simulations with the Reserve Bank of New Zealand’s core FPS model show how New Zealand’s broad macroeconomic environment might have evolved over the 1990s, if a US nominal yield curve and US TWI exchange rate movements under a common currency arrangement had been experienced.Relatively looser monetary conditions would have prevailed, and led to modest short-run output gains, greater excess demand pressures, noticeably higher CPI inflation rates over the whole of the 1990s, and less favourable trade balance outcomes, especially for the late 1990s.These macroeconomic outcomes are overall less favourable than those obtained from simulating the equivalent Australian monetary conditions.
Article
This paper (a) provides a framework for quantifying any economy's flexibility, and (b) reviews the evidence on New Zealand firms? birth, growth and death. The data indicate that, by and large, the labour market and the financial market are doing their job. Creative destruction ?revolutionizes the economic structure from within,? Joseph Schumpeter famously said, ?incessantly destroying the old one, incessantly creating a new one? (Schumpeter, 1975, p. 83). Innovation in business ? bringing new goods, new markets, new methods of production, new ways of organizing firms ? is the ?fundamental impulse that sets and keeps the capitalist engine in motion.? Does the economy have enough flexibility? Are there barriers in the way of entrepreneurship? This paper develops a framework for quantifying creative destruction. Applying the framework to New Zealand, I conclude that the sluggish productivity growth of the past fifteen years cannot be blamed on economic rigidities. The data depict an economy with ample creative destruction. Ascribing New Zealand's slow growth to a business?unfriendly culture is a misdiagnosis.
Article
This paper provides an overview of the analysis of the indirect effects of active labour market policies. Indirect effects arise where some of the improved labour market outcomes for programme participants come at the expense of other workers or jobseekers. The paper outlines some common theories about how indirect effects operate, and discusses approaches to estimating the strength of indirect effects. It also presents a brief summary of relevant empirical findings. The paper is intended as a relatively non-technical guide for policy analysts working on the design, costing, and evaluation of active labour market policies.
Article
Exxon Mobil and ConocoPhillips stock price has been predicted using the difference between core and headline CPI in the United States. Linear trends in the CPI difference allow accurate prediction of the prices at a five to ten-year horizon.
Article
This paper aims to address a gap in our understanding of immigrant health issues by examining the determinants of excess weight--an important indicator of current and future health. The paper combines data drawn from recent large health surveys to identify how the weight of recent immigrants compares with that of native-born people, and how the likelihood of becoming overweight or obese changes with additional years in Canada. We find evidence that on average, immigrants are substantially less likely to be obese or overweight upon arrival in Canada. These measures converge slowly to native-born levels, but there is marked variation by the ethnicity of the immigrant. Since changes in weight will reflect choices with respect to diet and activity, the extent to which overweight and obesity rates change with years in Canada may reflect the extent to which immigrants interact with or are influenced by members of their ethnic group who reside in the same area. We find evidence that ethnic group social network effects exert a quantitatively important influence on the incidence of being overweight and obese for members of most ethnic minorities, tempering the process of adjustment to Canadian lifestyle norms that may be driving excess weight gain with additional years in Canada.
Article
As the development of broadband access builds momentum, policy makers are increasingly turning their attention to the availability of these services in rural and remote areas.
Article
Broadband Internet access is one of the first services where there has been a convergence between communications platforms built for different purposes.
Article
Policy enabling tropical forests to approach their potential contribution to global-climate-change mitigation requires forecasts of land use and carbon storage on a large scale over long periods. In this paper, we present an integrated modeling methodology that addresses these needs. We model the dynamics of the human land-use system and of C pools contained in each ecosystem, as well as their interactions. The model is national scale, and is currently applied in a preliminary way to Costa Rica using data spanning a period of over 50 years. It combines an ecological process model, parameterized using field and other data, with an economic model, estimated using historical data to ensure a close link to actual behavior. These two models are linked so that ecological conditions affect land-use choices and vice versa. The integrated model predicts land use and its consequences for C storage for policy scenarios. These predictions can be used to create baselines, reward sequestration, and estimate the value in both environmental and economic terms of including C sequestration in tropical forests as part of the efforts to mitigate global climate change. The model can also be used to assess the benefits from costly activities to increase accuracy and thus reduce errors and their societal costs.
Article
The potential economic importance of electronic commerce, and the role of broadband in supporting e-commerce, has increasingly led governments to place emphasis on facilitating access to broadband networks. To a large extent the emphasis has been on a range of policies aimed at supporting development and diffusion of high speed network capability in the local loop. Although broadband infrastructure deployment is in the process of development and the extent to which it will cover entire populations or geographic areas is still not clear, governments appear to want to accelerate the infrastructure investment. There is a wide range of government initiatives structured in different ways and their underlying justifications are often quite different. In this context, the main concern of this paper is to examine whether these initiatives are efficient in spurring broadband deployment and to what extent governments should be involved. The paper argues that government policies should ... Déploiement de l’infrastructure à large bande : Le rôle de l’aide publique Compte tenu du vaste potentiel économique du commerce électronique et du rôle que la large bande joue dans son développement, les pouvoirs publics s’attachent davantage à faciliter l’accès aux réseaux à large bande. L’accent est mis dans une large mesure sur le développement et la diffusion d’infrastructures haut débit dans la boucle locale. Bien que son déploiement soit toujours en cours et que l’on ignore encore dans quelle mesure elle couvrira l’ensemble de la population ou des zones géographiques, les pouvoirs publics semblent désireux d’accélérer les investissements dans l’infrastructure. Les initiatives des pouvoirs publics sont très variées, diversement structurées, et leurs justifications sont souvent très différentes. Dans ce contexte, le présent document cherche avant tout à définir si ces initiatives parviennent réellement à accélé