Cloud Computing and Firm Growth

DeStefano, Timothy; Kneller, Richard; Timmis, Jonathan

Abstract

Cloud computing has shifted how firms access IT away from investment in fixed capital to pay-on-demand services that facilitate remote and simultaneous use. Using firm-level data we examine the impact of cloud adoption on firm performance and organizational geography with an IV approach that exploits cross-section and time-series variation in fiber broadband speeds as instruments. Cloud leads younger firms to increase revenue, employment, and productivity, whereas incumbent firms experience no scale effects and weaker productivity gains. Incumbents however undergo restructuring through establishment deaths and fewer births, while both types of firms experience geographic reorganization shifting farther from the headquarters.

Citation

DeStefano, T., Kneller, R., & Timmis, J. (in press). Cloud Computing and Firm Growth. Review of Economics and Statistics, 1-47. https://doi.org/10.1162/rest_a_01393

• Journal Article Type: Article
• Acceptance Date: Jun 26, 2023
• Online Publication Date: Nov 29, 2023
• Deposit Date: Jun 30, 2023
• Publicly Available Date: Jun 30, 2023
• Journal: Review of Economics and Statistics
• Print ISSN: 0034-6535
• Electronic ISSN: 1530-9142
• Publisher: Massachusetts Institute of Technology Press
• Peer Reviewed: Peer Reviewed
• Pages: 1-47
• DOI: https://doi.org/10.1162/rest_a_01393
• Keywords: Economics and Econometrics; Social Sciences (miscellaneous)
• Public URL: https://nottingham-repository.worktribe.com/output/22453709
• Publisher URL: https://direct.mit.edu/rest
• Additional Information: This is a pre-copyedited, author-produced version of an article accepted for publication in The Review of Economics and Statistics.