Does high-speed internet boost exporting?
The Productivity Commission’s latest working paper has just been published.
Access to high-speed internet provides a range of potential benefits to firms looking to enter export markets. At the most basic level, internet-based digital technologies, such as websites and online platforms, can increase the visibility of firms to potential foreign customers and reduce the search costs and informational frictions in establishing trade relationships. As internet technologies develop, new opportunities open up in areas that were traditionally considered non-tradable, as complex services and digital goods can increasingly be delivered remotely. If used well, these technologies can also have an indirect impact on firms' ability to trade internationally, through increasing their productivity and reducing costs, thus giving them a competitive edge in the global market.
Does high-speed internet boost exporting? by Lynda Sanderson, Garrick Wright-McNaughton and Naomitsu Yashiro explores whether uptake of high-speed, fibre-to-the-premises internet increases the likelihood that New Zealand firms export. Using detailed data on firms’ connection types and ICT activities linked to broader employment and firm performance data allows the research to examine whether early adopters of fibre internet were more likely than otherwise similar firms to start exporting, and whether this relationship differed according to how firms were already using the internet.