Is Ultra-Broadband Enough? The Relationship between High-Speed Internet and Entrepreneurship in Brandenburg

Abstract

Recent improvements in broadband infrastructure in Europe have introduced augmented possibilities for both businesses and individuals. As expected, the provision of high-speed internet connections for European users will be an important step towards Industry 4.0 as well as a better entrepreneurial milieu. Still, though scientific literature is replete with examples of how modern communication technologies boost productivity and economic performance, not much research indicates how broadband technologies may bolster entrepreneurship, especially at a very detailed, municipal level. The aim of this study was to find out whether high-speed broadband provision had any effect on higher firm entry rates in Brandenburg, Germany. This region was chosen because of its favorable position in the vicinity of the capital state, Berlin. We carried out an ordinary less square estimated regression analysis using a dataset built for 417 municipalities. The results show that ultra-broadband provision had no significant impact on well-performing municipalities and those located close to Berlin, with no impact in the general model, and also had a negative correlation in underperforming and peripheral areas (significant at a 5% level). This leads to the conclusion that advanced broadband infrastructure does not automatically translate into higher firm entry rates; there is no such urgency in the need for speed, as it might appear at first glance.