Abstract
This paper studies the effect of macro-level internet penetration on firm-level innovation in the United States, proxied by research and development expenditure. The IV approach is used to address the problem of potential endogeneity, covering data from 2000 to 2022 across five super industries: consumer goods and retail, energy and electricity, media and entertainment, financial services, and technology and telecommunications. The results show that internet penetration has a positive effect on the innovative performance of all sectors; however, this effect is more pronounced in the financial service and media sectors. Firm-specific characteristics also influence this relationship, such as debt-to-assets ratio, capital expenditure, and unemployment rate. Given sectoral differences, the study highlights the transformative role of internet accessibility in fostering innovation. While the analysis is limited to macro-level penetration in the U.S. context, the findings underline the importance of policies aimed at improving access to the internet, industry-specific digital transformation, and supporting R&D for sustainable economic growth.
School
School of Business
Department
Economics Department
Degree Name
MA in Economics
Graduation Date
Fall 2-19-2025
Submission Date
1-19-2025
First Advisor
Mina Ayad
Committee Member 1
Wael Abdullah
Committee Member 2
Mohammed Bouaddi
Extent
42 p.
Document Type
Master's Thesis
Institutional Review Board (IRB) Approval
Not necessary for this item
Recommended Citation
APA Citation
ElGarf, M.
(2025).Internet Penetration and Firm Innovation in the Digital Era: A Sectoral Analysis of U.S. Firms [Master's Thesis, the American University in Cairo]. AUC Knowledge Fountain.
https://fount.aucegypt.edu/etds/2435
MLA Citation
ElGarf, Mariam. Internet Penetration and Firm Innovation in the Digital Era: A Sectoral Analysis of U.S. Firms. 2025. American University in Cairo, Master's Thesis. AUC Knowledge Fountain.
https://fount.aucegypt.edu/etds/2435