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Broadband Infrastructure and Economic Growth

Author Info

Listed author(s):
  • 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 raised 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.

(This abstract was borrowed from another version of this item.)

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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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Find related papers by JEL classification:
  • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
  • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
  • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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