Spatial Heterogeneity, Broadband, and New Firm Formation

Abstract

Purpose: This paper examines the spatial heterogeneity associated with broadband Internet and new firm formation in a number of U.S. states. Methodology/Approach: Both ordinary least-squares regression and Geographically Weighted Regression are used for the estimation purpose. Findings: The global coefficient estimates of ordinary least-squares regression account for the marginal change in a phenomenon, but such a global measure cannot reveal the locally-varying dynamics. Using Geographically Weighted Regression, it was found that at the aggregate and economic sector levels, the association between single-unit firm births and the provision of broadband Internet varies across counties in Florida and Ohio. Originality/Value of paper: There are numerous studies on broadband Internet in the U.S., but this is the first that explicitly examines broadband provision and new firm formation by taking into account spatial heterogeneity across countries.

Keywords

• broadband Internet
• new firm formation
• spatial heterogeneity
• geographically weighted regression
• regional economy