Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312077 
Year of Publication: 
2024
Series/Report no.: 
CESifo Working Paper No. 11567
Publisher: 
CESifo GmbH, Munich
Abstract: 
This paper explores how improved internet infrastructure impacts supply chains and economic activity, focusing on Türkiye. Using the expansion of fiber-optic networks and firm-to-firm transaction data, we find that better connectivity shifts input sourcing to well-connected regions and diversifies supplier networks. We estimate a spatial equilibrium model with endogenous network formation and rational inattention and find that high-speed internet reduced information acquisition and communication costs. Enhanced connectivity increased real income by 2.2% in the median province. Our findings underscore the importance of digital infrastructure investments in fostering economic growth by improving supply chain efficiency and broadening firms' access to suppliers.
Subjects: 
digitalization
production networks
supply chains
JEL: 
L14
O33
R12
D83
H54
F14
D22
F15
L86
R58
O18
C63
Q55
E22
H41
Document Type: 
Working Paper
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