Broadband Provision and Knowledge-Intensive Firms: A Causal Relationship?

Despite the discussions about the importance of the digital economy, we are still far from understanding how Information and Communication Technologies (ICTs) affect economic activity in space. Recent studies have started untangling the spatial economic impact of ICTs, highlighting the potential use of ICTs as a local development tool. This paper contributes to this domain by exploring whether broadband Internet provision can act as an attractor for knowledge intensive business services in the US. Using Granger causality tests, this paper addresses the simultaneity issue between broadband Internet demand and supply at the very detailed spatial level of the US counties.