enced by discoveries of deposits and less of ambient infrastructure quality. Within the service sector, we leverage the detailed nature of the data to classify the data into three categories (subsectors), FDI in: financial services, technology services, and other services.<sup>13</sup> Our final dataset is a district-year panel between 2003 and 2018.

In addition, we compile data on the staggered arrival of submarine Internet cables to the coasts of various African countries, as well as the connections to landlocked countries, using data from www.africabandwidthmaps.com,<sup>14</sup> www.submarinecablemap.com, and other country-specific sources. We complement this with data on terrestrial fiber backbone network from www.africabandwidthmaps.com. Figure 1 shows trends in the number of countries connected to at least one submarine cable between 2003 and 2018.

We complement the Internet data with additional data on infrastructure such as electricity grid network from https://gridfinder.org/, and road density from the Global Roads Inventory Project.<sup>15</sup> Also, we use data on the quality of governance from the World Bank’s World Governance Indicator database<sup>16</sup> and finally firm-level data in nine countries<sup>17</sup> from the World Bank Enterprise Survey (WBES).

Further, to avoid zero-inflated data, we restrict our analysis to subnational districts that received at least one FDI during the sample period. Our final data is a balanced panel of 401 subnational districts in 32 countries over a 16-year period.<sup>18</sup> Summary statistics of the full data are presented in Table 1.

# **4 Empirical Strategy**

In the 1990s, satellite transmission was the main source of Africa’s Internet connection. It was characterized by high connection costs and slow speeds, which affected the utilization of Internet services for productive uses. To address these issues, several countries partnered with telecom companies to undertake massive infrastructural investments by laying fiber-optic sub-

> 13Financial services include activities such as retail banking, investment banking, and insurance; Technology services classification include FDI in business services (computer systems design, software publishers, motion picture & sound recording industries, custom computer programming services, travel and ticketing, rental and leasing services), software and IT services, biotechnology, paper printing & packaging, communications, consumer electronics, Semiconductors, Aerospace; Other services include, retail, health care, hospitality, and real estate services.

> 14A digital consulting firm focused on publishing maps on Internet infrastructure in Africa

> 15https://www.globio.info/download-grip-dataset

> 16https://info.worldbank.org/governance/wgi/

> 17These include, Ethiopia, Ghana, Kenya, Mauritania, Nigeria, Senegal, Tanzania, Uganda, and Zambia

> 18These include: Angola, Benin, Botswana, Burundi, Cameroon, Central African Republic, Democratic Republic of Congo, Eritrea, Ethiopia, Gabon, Ghana, Kenya, Lesotho, Madagascar, Mali, Mauritania, Mozambique, Namibia, Niger, Nigeria, Republic of the Congo, Rwanda, Senegal, Somalia, South Africa, Sudan, Eswatini, Tanzania, Togo, Uganda, Zambia, and Zimbabwe

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