Broadband Adoption and Firm Performance: Evidence from Informal Sector Firms in India

Using unit level data for informal manufacturing sector, drawn from the Government of India’s National Sample Survey Organization, this paper addresses the impact of broadband adoption on firm performance. We also consider productivity effects associated with various application of broadband technology. Our measure of firm performance consists of labour productivity, gross value added, total output and total factor productivity. Using recently developed econometric strategy based on quantile treatment regressions we find that the average effect of broadband adoption on small firms’ productivity is positive and significant. With respect to the adoption of at least one of the broadband applications, we show that for firms at the upper quantiles of productivity distribution is yielding significant gains in their performance.