Illegal downloads are helping – not hindering – the music industry, a new report claims.

The report concludes that "downloads have a zero effect on sales", adding that "for popular albums the impact of file sharing on sales is likely to be positive".

The study is co-authored by professors from Harvard Business School and the University of North Carolina

One, Koleman Strumpf, told the Guardian: "Our hypothesis was that if downloads are killing music then albums that are downloaded more intensively should sell less. But after adjusting for the effects of popularity we discovered that file sharing has no statistically significant effect on sales.

"The fact that there's a correlation does not imply that downloading is the root cause of these people buying less. File sharing is done primarily by teenagers and college kids because they have a lot of time on their hands but they don't have a lot of money. If we got rid of file sharing tomorrow, it doesn't necessarily mean these kids would be buying any more music."

Strumpf believes the real cause of the decline in music sales to be CD price increases. He told the Guardian: "Over the period 1999 to 2003, DVD prices fell by 25 per cent and the price of players fell in the US from over $1,000 to almost nothing. At the same time, CD prices went up by 10 per cent. Combined DVD and VHS tape sales went up by 500m, while CD sales fell by 200m, so a possible explanation is that people were spending on DVDs instead of CDs."

BPI spokesperson Matt Phillips isn't convinced: "We consider it a very flawed study." Similarly, the International Federation for the Phonographic Industries (IFPI) has criticised the study for including the Christmas period when people are buying CDs as gifts.

Strumpf defends the study from these criticisms claiming: "We got rid of the Christmas season and just looked at the first half of our data. We still find the same effect."

He added: "If file sharing is killing record sales, why are records starting to sell better?