AI Unbound: Digital Infrastructure, AI Adoption, and Firm Performance
Joint with Nuriye Melisa Belgin (Koç University)
We study how digital infrastructure shapes AI diffusion and firm outcomes.
Using administrative and survey data on Turkish firms and plausibly exogenous broadband variation from the staged expansion of the BOTAŞ-linked fibre network, we show that broadband expansion increases AI adoption, especially among SMEs and for cloud-dependent technologies.
Predetermined organizational readiness conditions this response. Infrastructure-induced adopters subsequently expand ICT employment, strengthen managerial structures, and increase professional and managerial employment. Labor productivity and export intensity also rise. The results identify digital infrastructure and organizational capability as complementary inputs into AI adoption and its economic gains.