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Modern Telecommunications Infrastructure and Economic Activity: An Empirical Investigation

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  • Greenstein, Shane M
  • Spiller, Pablo T

Abstract

This study focuses on the impact of telecommunication infrastructure on economic activity in two sectors: flare, insurance and real estate; and manufacturing. Results indicate that modernization of the telephone network is associated with more fire, insurance and real estate activity in the local region, while it is not associated with more manufacturing. Once other determinants of growth are controlled for, a doubling of optic fiber cable leads to at least a 10%, and possibly a much higher, increase in the level of economic activity in fire, insurance and real estate. This result implies that the level of modernization of a telecommunications network has an economically important influence on the amount of high tech white collar activity in a region, while it is less important for manufacturing activity, which typically employs less modern telecommunications services. Copyright 1995 by Oxford University Press.

Suggested Citation

  • Greenstein, Shane M & Spiller, Pablo T, 1995. "Modern Telecommunications Infrastructure and Economic Activity: An Empirical Investigation," Industrial and Corporate Change, Oxford University Press, vol. 4(4), pages 647-665.
  • Handle: RePEc:oup:indcch:v:4:y:1995:i:4:p:647-65
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    Cited by:

    1. Madureira, António & den Hartog, Frank & Bouwman, Harry & Baken, Nico, 2013. "Empirical validation of Metcalfe’s law: How Internet usage patterns have changed over time," Information Economics and Policy, Elsevier, vol. 25(4), pages 246-256.
    2. Alfredo M. Pereira & Jorge M. Andraz, 2007. "Public Investment In Transportation Infrastructures And Industry Performance In Portugal," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 32(1), pages 1-20, June.
    3. Bertschek, Irene & Briglauer, Wolfgang & Hüschelrath, Kai & Kauf, Benedikt & Niebel, Thomas, 2016. "The economic impacts of telecommunications networks and broadband internet: A survey," ZEW Discussion Papers 16-056, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Hossine Sharif, Sajjad, 2016. "The Role of Telecommunication over the Economic Development of Bangladesh," MPRA Paper 77077, University Library of Munich, Germany, revised 13 Aug 2016.
    5. Pradhan, Rudra P. & Arvin, Mak B. & Norman, Neville R. & Bele, Samadhan K., 2014. "Economic growth and the development of telecommunications infrastructure in the G-20 countries: A panel-VAR approach," Telecommunications Policy, Elsevier, vol. 38(7), pages 634-649.
    6. Jitendra Parajuli & Kingsley E. Haynes, 2015. "Broadband Internet and new firm formation: a US perspective," Chapters,in: Innovation and Entrepreneurship in the Global Economy, chapter 9, pages 210-236 Edward Elgar Publishing.
    7. Madden, Gary & Savage, Scott J., 2000. "R&D spillovers, information technology and telecommunications, and productivity in ASIA and the OECD," Information Economics and Policy, Elsevier, vol. 12(4), pages 367-392, December.
    8. Alfredo Marvão Pereira & Rui Manuel Pereira, 2017. "Infrastructure Investment in Portugal and the Traded/Non-Traded Industry Mix," GEE Papers 0078, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Sep 2017.
    9. Madden, Gary & Savage, Scott J, 1998. "Sources of Australian Labour Productivity Change 1950-1994," The Economic Record, The Economic Society of Australia, vol. 74(227), pages 362-372, December.
    10. Abbas Valadkhani, 2003. "An Empirical Analysis of Australian Labour Productivity," Australian Economic Papers, Wiley Blackwell, vol. 42(3), pages 273-291, September.
    11. Shane M. Greenstein & Pablo T. Spiller, 1996. "Estimating the Welfare Effects of Digital Infrastructure," NBER Working Papers 5770, National Bureau of Economic Research, Inc.
    12. Alfredo M. Pereira & Jorge M. Andraz, 2013. "On The Economic Effects Of Public Infrastructure Investment: A Survey Of The International Evidence," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(4), pages 1-37, December.
    13. Michelle Connolly & James Prieger, 2009. "Economics at the FCC, 2008–2009: Broadband and Merger Review," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(4), pages 387-417, December.
    14. Correa, Lisa, 2006. "The economic impact of telecommunications diffusion on UK productivity growth," Information Economics and Policy, Elsevier, vol. 18(4), pages 385-404, November.
    15. repec:rss:jnljee:v5i3p2 is not listed on IDEAS
    16. Valadkhani Abbas, 2005. "Sources of Iranian Labour Productivity," Review of Middle East Economics and Finance, De Gruyter, vol. 3(3), pages 32-47, December.
    17. Valadkhani, Abbas, 2006. "Labour Productivity in Iran," Economics Working Papers wp06-13, School of Economics, University of Wollongong, NSW, Australia.
    18. Sang H. Lee & John Levendis & Luis Gutierrez, 2012. "Telecommunications and economic growth: an empirical analysis of sub-Saharan Africa," Applied Economics, Taylor & Francis Journals, vol. 44(4), pages 461-469, February.
    19. Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, vol. 91(4), pages 909-923, September.
    20. Li, Yan, 2011. "The competitive landscape of China’s telecommunications industry: Is there a need for further regulatory reform?," Utilities Policy, Elsevier, vol. 19(3), pages 125-133.
    21. Georges Vivien Houngbonon & Julienne Liang, 2017. "Broadband Internet and Income Inequality," Working Papers hal-01653815, HAL.
    22. Madden, Gary & Savage, Scott J., 1998. "CEE telecommunications investment and economic growth," Information Economics and Policy, Elsevier, vol. 10(2), pages 173-195, June.
    23. Madden, Gary & Savage, Scott J., 1999. "Telecommunications productivity, catch-up and innovation," Telecommunications Policy, Elsevier, vol. 23(1), pages 65-81, February.
    24. António Madureira & Nico Baken & Harry Bouwman, 2011. "Value of digital information networks: a holonic framework," Netnomics, Springer, vol. 12(1), pages 1-30, April.

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