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Telecommunications technologies and regional development: theoretical considerations and empirical evidence


  • Peter Nijkamp

    (Department of Economics, Free University, P.O. Box 7161, 1007 MC Amsterdam, The Netherlands)

  • Roberta Capello

    (Department of Economics, Politecnico of Milan, Piazza Leonardo da Vinci 32, I-20133 Milan, Italy)


The paper provides an analysis of network externalities in the telecommunications sector and their effects on corporate and regional performance. It can essentially be regarded as part of the general theoretical reflection on the role of telecommunications in economic development, by emphasising the importance of telecommunications for future economic growth. However, the advantages derived from these technologies stem not only from the technological changes taking place in the sector, but also from their nature as interrelated technologies. This stems from the fact that when a new subscriber joins the network, the marginal costs of his entry are lower than the marginal benefits he creates for people (firms) already networked. This difference between marginal costs and benefits (in favour of the benefits) inevitably reflects on industrial performance and - via multiplicative effects - on regional performance. The paper presents an empirical part where an effort is made to measure telecommunications network externalities. Regional differences in the exploitation of network externalities emerge between firms located in the north and in the south of Italy.

Suggested Citation

  • Peter Nijkamp & Roberta Capello, 1996. "Telecommunications technologies and regional development: theoretical considerations and empirical evidence," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 30(1), pages 7-30.
  • Handle: RePEc:spr:anresc:v:30:y:1996:i:1:p:7-30

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    Cited by:

    1. Daoqin TONG & Sandy DALL’ERBA, 2008. "Spatial Disparities In The Chinese Ict Sector: A Regional Analysis," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 28, pages 111-129.
    2. Fulvio Castellacci & Davide Consoli & Artur Santoalha, 2018. "Technological Diversification in European Regions: The Role of E-skills," Working Papers on Innovation Studies 20181009, Centre for Technology, Innovation and Culture, University of Oslo.
    3. David Newlands & Melanie Ward, 1998. "Telecommunications infrastructures and policies as factors in regional competitive advantage and disadvantage," ERSA conference papers ersa98p347, European Regional Science Association.
    4. Antje Burmeister & Faridah Djellal, 2004. "L'impact des technologies de l'information sur l'organisation spatiale des activités de services : le cas du transport routier de marchandises et des services intensifs en connaissance," Innovations, De Boeck Université, vol. 19(1), pages 53-73.
    5. Danielle Galliano & Pascale Roux, 2008. "Organisational motives and spatial effects in Internet adoption and intensity of use: evidence from French industrial firms," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(2), pages 425-448, June.
    6. Galliano, D. & Roux, P., 2005. "The evolution of the spatial digital divide : from internet adoption to internet use by french industrial firms," Economics Working Paper Archive (Toulouse) 200513, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
    7. Juan Carlos Rodríguez-Cohard & Encarnación Moral-Pajares, 2005. "ICT, global markets and small firms in less-developed regions in Europe - the case of mature sectors in a Spanish Province," ERSA conference papers ersa05p655, European Regional Science Association.
    8. Maureen Kilkenny, 1995. "Transport Costs and Rural Development," Food and Agricultural Policy Research Institute (FAPRI) Publications 95-wp133, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    9. repec:spr:epolin:v:45:y:2018:i:2:d:10.1007_s40812-017-0084-7 is not listed on IDEAS
    10. Dohse, Dirk & Lim, Cheng Yee, 2016. "Macro-geographic location and internet adoption in poor countries: What is behind the persistent digital gap?," Kiel Working Papers 2067, Kiel Institute for the World Economy (IfW).
    11. Rodriguez Cohard, Juan Carlos & Bernal Jurado, Enrique, 2002. "E-commerce and territorial development in the Objective-1 spanish regions," ERSA conference papers ersa02p326, European Regional Science Association.
    12. Juan Eduardo Chica & Carlos Marmolejo, 2016. "Knowledge economy and metropolitan growth: Barcelona and Helsinki metropolitan areas as case studies," International Journal of Knowledge-Based Development, Inderscience Enterprises Ltd, vol. 7(1), pages 22-42.
    13. Harminder Battu & John Finch, 1998. "Integrating knowledge effects into university impact studies. A case study of Aberdeen University," Working Papers 98-08, Department of Economics, University of Aberdeen.
    14. Kum-Soon Lim & Deok-Joo Lee & Hyung-Sik Oh, 2008. "Strategic investment planning in regional deployment of telecommunication services: a real options approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(2), pages 391-411, June.

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