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We examine the gap in broadband access to the Internet between minority groups and white households with geographically fine data on DSL subscription. In addition to income and demographics, we also examine quality of service and competition as components of the Digital Divide. The gaps in DSL demand for blacks and Hispanics do not disappear when income, education, and other demographic variables are accounted for. However, lack of competition is an important driver of the Digital Divide for blacks. Service quality is an important determinant of demand, and ignoring it masks the true size of the DSL gap for Hispanics.
What is the "growth penalty" when a country's entrepreneurship deviates from its optimal level? We use data on entrepreneurship for a panel of developed and developing countries over 2003-2011 to estimate growth equations. We treat the impact of entrepreneurship on real GDP growth as heterogeneous across countries. The methodology accounts for unobserved heterogeneity among countries in the optimal entrepreneurship rate and other factors affecting growth. In less developed countries, there is not enough entrepreneurship, and increases in the entrepreneurship rate have a sizeable positive effect on growth. In high income countries, entrepreneurship appears to be close to the optimum. We also explore how the growth penalty varies across countries. Higher levels of R&D capability decrease the growth penalty of having too few entrepreneurs, suggesting that R&D and entrepreneurship are substitutes. Corruption increases the opportunity cost of having a suboptimal entrepreneurship level, a finding that is in accord with the hypothesis that corruption can "grease the wheels" of commerce by speeding up bureaucratic processes. Countries with greater entrepreneurial capability suffer a higher growth penalty: the higher the ability of the marginal entrepreneur, the higher is the opportunity cost to the economy of not taking advantage of her talents.
Broadband is becoming increasingly important to national economies and the personal lives of users. However, broadband availability and adopation are not diffusing in rural and urban areas at the same rates. This article updates the rural broadband digital divide, with special attention paid to mobility. Empirical estimations of broadband provision and usage in the US show that rural areas have fewer high-speed fixed and mobile providers but more slower-speed fixed providers than urban areas. While rural availability of mobile broadband is lower than in urban areas, it still helps fill in gaps in fixed broadband coverage in rural areas. The rural gap in fixed broadband usage remains, but the mobile broadband usage gap disappears after controlling for household demographics. The raw broadband usage gaps between rural and urban households are proportionally greater for low-income households. The potential for mobile broadband to benefit rural areas through economic development is also examined.
Research and development (R&D) has a large effect on both state output and total factor productivity in the long run. Our estimates for the private sector of the U.S. states from 1963 to 2007 show that the R&D elasticity averages 0.056-0.143. The implied returns to state Gross Domestic Product (GDP) from R&D spending are 82-211%. There are also positive R&D spillovers, with 70-80% of the total returns accruing to other states. We also find that states with more human capital have higher own-and other-R&D elasticities, and those in lowest tier of economic development have the least own-state R&D elasticity but the highest other-R&D elasticity. In addition, we find that the positive effect of R&D spillovers across states is larger when we consider R&D spillovers across states based on economic similarity of R&D across sectors.
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