BROADBAND PROVISION AND FIRM LOCATION IN OHIO: AN EXPLORATORY SPATIAL ANALYSIS

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ABSTRACT

Information and communication technologies (ICTs) are often cited as an important factor in firm location decisions. This is especially true for firms engaged in information intensive activities and those that have a strong need for advanced services such as broadband. Despite the suggested importance of these technologies, quantitative work evaluating the link between firm location and broadband provision is sparse and existing knowledge remains largely theoretical and speculative. However, theoretical evaluations of the impact of ICTs on firm location do provide a foundation for quantitative analyses of this relationship and may be grouped into three schools of thought: the deconcentration school, the concentration school, and the heterogeneous effects school. The predictions made by these three schools of thought will be analysed in an exploratory context to better understand the relationship between firm location and ICTs, with a focus on broadband service provision. A combination of basic spatial statistical analytical tools and geographic information systems (GIS) will be used in an exploratory spatial data analysis framework to evaluate the relationship between firm location and broadband provision trends from 1999 to 2004 in the state of Ohio. Results suggest that changes in broadband provision have no relationship with changes in firm location. However, a disaggregated, firm level analysis of this relationship does provide statistically significant results for a subset of industrial sectors. Firm size is also found to impact the correlation between firm presence and broadband provision. These results suggest that firm size and industry are perhaps critical components in determining the relative importance of ICTs, such as broadband, in firm location decisions.

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