Open AccessBroadband Speed and Firm Entry in Digitally Intensive Sectors: The Case of Croatia
Author(s) -
Boris Drilo,
Nebojša Stojčić,
Maruška Vizek
Publication year - 2022
Publication title -
društvena istraživanja/društvena istraživanja
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.18
H-Index - 15
eISSN - 1848-6096
pISSN - 1330-0288
DOI - 10.5559/di.31.1.02
Subject(s) - broadband , business , panel data , investment (military) , industrial organization , quality (philosophy) , telecommunications , economics , econometrics , engineering , philosophy , epistemology , politics , political science , law
We explore how improvements in digital infrastructure contribute to digital transformation of the Croatian economy. More specifically, we investigate under what conditions improvements in broadband speed are conductive for firm entry in digitally intensive sectors at the local level (cities and municipalities; LGUs) during the period 2014–2017. The results of the benchmark random effects panel data model suggest that a 10 percent increase in broadband speed increases the number of new digitally intensive firms by 0.68. Two-way interactions between explanatory variables indicate that improvements in broadband infrastructure yield the greatest number of new firm entries in densely populated LGUs, and in LGUs with a higher quality of human capital and greater public investment in physical infrastructure. Using the spatial Durbin panel method, we find improvements in broadband infrastructure exhibit positive firm entry effects both within and between cities and municipalities.