Scandinavian Working Papers in Economics

Discussion Papers on Economics,
University of Southern Denmark, Department of Economics

No 2/2011: Lightning, IT diffusion and economic growth across US states

Thomas Barnebeck Andersen (), Jeanet Bentzen (), Carl-Johan Dalgaard () and Pablo Selaya ()
Additional contact information
Thomas Barnebeck Andersen: Department of Business and Economics, Postal: Department of Business and Economics, University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Jeanet Bentzen: Department of Economics, Postal: Department of Economics, University of Copenhagen, Øster Farimagsgade 5, building 26, DK1353 Copenhagen, Denmark
Carl-Johan Dalgaard: Department of Economics, Postal: Department of Economics, University of Copenhagen, Øster Farimagsgade 5, building 26, DK1353 Copenhagen, Denmark
Pablo Selaya: Department of Economics, Postal: Department of Economics, University of Copenhagen, Øster Farimagsgade 5, building 26, DK1353 Copenhagen, Denmark

Abstract: Empirically, a higher frequency of lightning strikes is associated with slower growth in labor productivity across the 48 contiguous US states after 1990; before 1990 there is no correlation between growth and lightning. Other climate variables (e.g., temperature, rainfall and tornadoes) do not conform to this pattern. A viable explanation is that lightning influences IT diffusion. By causing voltage spikes and dips, a higher frequency of ground strikes leads to damaged digital equipment and thus higher IT user costs. Accordingly, the flash density (strikes per square km per year) should adversely affect the speed of IT diffusion. We find that lightning indeed seems to have slowed IT diffusion, conditional on standard controls. Hence, an increasing macroeconomic sensitivity to lightning may be due to the increasing importance of digital technologies for the growth process.

Keywords: Climate; IT diffusion; economic growth

JEL-codes: O33; O51; Q54

67 pages, February 1, 2011

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