When metropolitan location is not enough: how digital technology supported businesses during COVID‐19

Overview & Synopsis

Digital technology has played a major role in helping businesses withstand the economic shock resulting from the health crisis. The paper examines how digital technology, particularly broadband access, shapes the economic resilience of French establishments across the metropolitan-to-peripheral spectrum. Using a large survey of businesses from March 2020 to December 2021 and an exact matching procedure, we find that broadband access was crucial in helping businesses manage the crisis, particularly in areas outside major urban centers. Results are robust across indicators of economic performance, definitions of digital technology, matching variables, and area typologies. Although other factors may play a role, differences in digital maturity across locations account for a non-negligible part of the spatial variation in broadband's impact. The results suggest that the health crisis may have helped narrow the gap between central and peripheral regions, as establishments outside urban centers were forced to adopt digital technologies.