Positive impact of digital infrastructure on the development of SSA, by comparing data from 177 countries between 1990 and 2019.

Calderon and Cantu (2020) 1990-2019 Global The relationship between ICT adoption and firm productivity has been widely studied in the literature, mainly suggesting positive effects. Cardona et al. (2013) summarize the empirical literature on ICT adoption and productivity by classifying the literature between methodology used, aggregation level, and type of ICT. The authors conclude that most of the studies find positive and statistically significant effects of ICT adoption on productivity. They also note the methodological differences apparent in the empirical literature, as well as the impact of estimating effects at different levels of aggregation (such as country-level versus firm-level). Additionally, Cardona et al. (2013) find stronger productivity effects of ICT at the macroeconomic levels (country and continents) than at the firmlevel. Welsum (2007) adds that measured total factor productivity (TFP) should rise in sectors using ICT, but it is possible that this occurs more rapidly in already highly productive and technological sectors. At the same time, Basu et al. (2003) suggest that the adoption of ICT may be associated with a decrease in total factor productivity (TFP), which could be attributed to the learning curve involved in the adoption of these technologies and the accompanying organizational changes. Similarly, Schweikl and Obermaier (2019) review 86 empirical studies at the firm level and claim that this productivity paradox could be explained by adjustment delays, measurement issues, mismanagement, and unrealistic expectations on the ICT productivity effects.

The productivity effects of ICT are even more challenging to generalize at the sector level, especially between manufacturing and service firms. Bertschek et al. (2013) find that there is no causal effect of fixed broadband internet adoption and productivity using data from a sample of German manufacturing and services firms between 2001 and 2003. The identification strategy relies on an instrumental variable approach considering that, by that time, only 60 percent of the firms had adopted broadband internet. However, the authors find that broadband internet adoption has a causal effect on innovation activities. Aboal and Tacsir (2015) complement the previous findings by exploring the role of ICT adoption (especially, the internet) in the performance of manufacturing and services firms in Uruguay. The authors find that investment in ICT has a significant and positive correlation with the productivity of both manufacturing and services firms. DeStefano et al. (2018) study the heterogenous effects of ICT adoption (especially, broadband internet) on firm performance in the UK from 1999 to 2005. The authors use a comprehensive dataset on the physical units of ICT used within a firm, known as the Ci Technology Database (CiTDB) and conclude that ICT adoption has a causal effect<sup>7</sup> on firm size (measured by sales or employees) but not on productivity. In contrast, more recent studies, such as Cusolito et al. (2020), estimate the effects of ICT adoption (like the creation of a website and email address) on the productivity of manufacturing firms in 82 developing countries from 2002 to 2019 and find significant positive effects on firms’ revenue-based total factor

> 7 To correct for endogeneity concerns, the authors use an instrumental variable two-stage least squares (2SLS) approach, in which they exploit the variation in the determinants of ICT.

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