Croce, & Grilli, 2013; Fabling et al., 2016; Grimes, Ren, & Stevens, 2012; Haller & Lyons, 2015). I now briefly discuss this literature.

Akerman et al. (2015) use Norwegian data and a quasi‐experiment to show that ICTs are innovations biased towards skilled workers. To identify the intent‐to‐treat effects, the authors exploit the staggered roll‐out of broadband internet. To estimate the production function and thus productivity, they use the Levinsohn and Petrin (2003) methodology. The authors find evidence that the availability of broadband is associated with a substantial increase in the output elasticity of skilled labor. They find the opposite effect for unskilled labor.

Fabling et al. (2016) study the effect of ultrafast broadband (UFB) internet on labor demand and productivity in New Zealand between 2010 and 2012. UFB was defined by the government as download speeds of up to 100Mbps and upload speeds of up to 50Mbps. The authors use the proximity to schools as an instrument for broadband availability since the government targeted schools and hospitals in their expansion plans of UFB to reach 80 percent of the population by 2022. The technology through which UFB can be obtained and the authors focus on is (optic) fiber. These authors do not find any statistically significant effects and suggest that most gains from UFB would arise as a result of selection. Their results suggest that gains from UFB would be related to complementary investments by firms.

Bertschek et al. (2013) do not find a statistically significant effect of broadband on labor productivity, but find positive effects on firm innovation in Germany. Their analysis covers the period 2001 to 2003 when there was already a high penetration rate of broadband use by firms and focus on DSL technology. The authors exploit broadband availability at the postal code level to identify the causal effects.

Colombo et al. (2013) find negligible effects of adopting broadband applications in small and medium enterprises in Italy during the period 1998‐2004. The authors base their analysis on services which require broadband speeds and construct their variable of interest using principal component analysis. Their results point to the complementarity of broadband with other investments at the firm, those related to management practices.

The paper also relates to the literature about production functions and total factor productivity (TFP) estimation ((D. A. Ackerberg, Caves, & Frazer, 2015; De Loecker, 2013; De Loecker & Warzynski, 2012; Gandhi, Navarro, & Rivers, 2016; Levinsohn & Petrin, 2003; Olley & Pakes, 1996). The paper contributes to this literature by explicitly modelling an endogenous total factor productivity process which is governed by past productivity as in D. Ackerberg et al. (2006) and the previous adoption of broadband through broadband technology, namely DSL, cable or optical Fiber. A more detailed discussion about these methods is postponed to the section where the methodology is explained.

# Data description

The main data set is composed of an unbalanced panel of 14,479 plants in the manufacturing sector in Colombia, spanning over 7 years (2008‐2014) of data from the Annual Manufacturing Survey 4