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Broadband Infrastructure and Economic Growth

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Author Info

  • Nina Czernich
  • Oliver Falck
  • Tobias Kretschmer
  • Ludger Woessmann

Abstract

We estimate the effect of broadband infrastructure, which enables high-speed internet, on economic growth in the panel of OECD countries in 1996-2007. Our instrumental-variable model derives its non-linear first stage from a logistic diffusion model where pre-existing voice-telephony and cable-TV networks predict maximum broadband penetration. We find that a 10 percentage-point increase in broadband penetration raises annual per-capita growth by 0.9-1.5 percentage points. Results are robust to country and year fixed effects and controlling for linear second-stage effects of our instruments. We verify that our instruments predict broadband penetration but not diffusion of contemporaneous technologies like mobile telephony and computers.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 121 (2011)
Issue (Month): 552 (05)
Pages: 505-532

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Handle: RePEc:ecj:econjl:v:121:y:2011:i:552:p:505-532

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References

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  1. Michal Grajek & Tobias Kretschmer, 2006. "Usage and Diffusion of Cellular Telephony, 1998-2004," Working Papers 06-21, NET Institute, revised Oct 2006.
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  18. David H. Autor & Frank Levy & Richard J. Murnane, 2001. "The Skill Content of Recent Technological Change: An Empirical Exploration," NBER Working Papers 8337, National Bureau of Economic Research, Inc.
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  21. repec:fth:prinin:455 is not listed on IDEAS
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