meaning the increased relative proximity of firms allows them to profit from knowledge spillovers and a shared labor pool.

Transport infrastructure can also have positive effects outside the manufacturing industry even though evidence is scarcer for other key economic sectors such as tourism or agriculture. Focusing on the tourism sector, Khadaroo and Seetanah (2008) assess the importance of transport infrastructure in determining the ability of a country to develop as an international tourism destination. Based on a panel data set of bilateral tourism flows among 28 countries over the decade 1990–2000, the study finds that – besides tourism infrastructure and other classical determinants – stocks of transport infrastructure like roads, airport terminals, and ports are indeed significant determinants of tourism inflows.

# **Information and communication technologies (ICT) infrastructure is associated with increased productivity**

Linkages between ICT infrastructure and productivity are well documented at the country‐level. Analyzing OECD countries between 1996 and 2007, Czernich et al. (2012) find that a 10 percent increase in broadband penetration increases GDP growth by 0.9 to 1.5 percentage points. Albiman and Sulong (2016) analyze 45 Sub‐Saharan African countries from 1990 to 2014 and find that positive effects of ICT infrastructure on economic growth are evident once a penetration rate threshold of about 5 percent has been crossed for mobile phones, internet, and telephone lines.

This positive relationship between ICT infrastructure and performance holds also at the firm level. Paunov and Rallo (2015) use Enterprise Survey data for firms in 117 developing and emerging countries between 2006 and 2011 to quantify the link between ICT and productivity. Overall, an increase in an industry’s use of the internet by one standard deviation increases the labor productivity of an average firm in this industry from the 50<sup>th</sup> to the 55<sup>th</sup> percentile of the distribution. This effect is heterogeneous amongst firms, with the most productive firms showing three times the increase of the least productive firms. Using the same data, the authors also identify positive effects on innovation activities. An increase in industry internet usage by one standard deviation is associated with an increase in ownership of quality certificates and patents of 3 and 5 percent, respectively (Paunov and Rollo, 2016). In a meta‐regression of 70 studies quantifying the relationship between ICT infrastructure and productivity in a production function framework, Polák (2017) finds that an increase in ICT investments of 1% increases productivity by 0.3% on average when controlling for publication bias.

# **A large fraction of the global economy is dependent on water supply**

In addition to the attention given to electricity, transport, and ICT infrastructure, water supply is a further crucial determinant of economic activity. According to one assessment, 42% of the total global active workforce is employed in heavily water‐dependent jobs, while a further 36% are moderately water‐ dependent, meaning that water is a necessary input somewhere in their value chain (United Nations World Water Assessment Programme, 2016). Overall, this amounts to more than three quarters of all jobs on a global level being dependent on water supply. As a result, differences in water availability can explain differences in economic activity between countries. Debaere (2014) exploits cross‐sectional variation in 134 countries and over 200 sectors to show that abundant water resources lead to a comparative advantage for countries and to higher exports of water‐intensive products, even though this factor is small in comparison to the influence of labor or physical capital. Furthermore, improving water supply infrastructure has impacts on economic growth: According to the United Nations Environment Program, investments in small projects providing safe water supply and basic sanitation in Africa could lead to an 6