Assessment of the effect of broadband expansion on the economy reviewed

Despite consensus about the positive impact of broadband expansion on the economy, from an aggregate perspective, this impact does not seem to be homogeneous for the whole economy. By using a two‐way multivariate panel data model subjected to Bayesian estimation, this study aims to determine the effect of broadband expansion on Brazilian economic sectors. To account for regional differences, the sampled data were grouped into clusters (clustering) to spot municipalities with similar characteristics. The results indicate that the impact of broadband expansion is not positive for all sectors. Actually, it was positive in more dynamic and technology‐intensive sectors (e.g., industrial and service sectors) but negative for the agricultural sector.