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The Impact of Broadband Infrastructure on Economic Growth in Egypt and Some Arab and Emerging Countries

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  • Mona Badran

    () (Faculty of Economics and Political Science, Cairo University)

Abstract

Infrastructure investments expansion typically adds to the productive capacity in an economy, and thus to its economic growth. Network industries account for between one–tenth and one-quarter of economy wide investments (OECD 2009 B). Telecom industry is one of the network industries, and broadband is a new technology that is widely used all over the world. It is the popular mode of access to the internet, as it refers to high speed internet access. This study aims at examining the impact of broadband infrastructure on economic growth in emerging countries and Arab countries. In addition, the impact of competition in telecom sector has been included in the growth equation estimated to control for the effect of competition in telecom sector, and thus broadband, on the economic growth in these countries. The empirical study reaches a conclusion in line with previous studies that there is a positive impact of broadband uptake on economic growth. In addition, the contribution of this paper is also in the construction of the competition index which was statistically insignificant, but became significant once we controlled for FDI as a percent of GDP. Thus, governments should create an enabling environment and open their markets for more competition in order to induce the establishments of more broadband and telecom networks in their respective countries.

Suggested Citation

  • Mona Badran, 2011. "The Impact of Broadband Infrastructure on Economic Growth in Egypt and Some Arab and Emerging Countries," Working Papers 591, Economic Research Forum, revised 06 Jan 2011.
  • Handle: RePEc:erg:wpaper:591
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    References listed on IDEAS

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    1. 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.
    2. Sridhar, Kala Seetharan & Sridhar, Varadharajan, 2007. "Telecommunications Infrastructure And Economic Growth: Evidence From Developing Countries," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(2), pages 37-56.
    3. Badran, M.F., 2007. "What determines broadband uptake in emerging countries? An empirical study," MPRA Paper 37529, University Library of Munich, Germany.
    4. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, March.
    5. Sekkat Khalid, 2007. "Sources of Growth in Morocco: An Emperical Analysis in a Regional Perspective," Review of Middle East Economics and Finance, De Gruyter, vol. 2(1), pages 1-17, June.
    6. Carlo Maria Rossotto & Khalid Sekkat & Aristomene Varoudakis, 2005. "Opening up telecommunications to competition and MENA integration in the world economy," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(7), pages 931-955.
    7. Nina Czernich & Oliver Falck & Tobias Kretschmer & Ludger Woessmann, 2011. "Broadband Infrastructure and Economic Growth," Economic Journal, Royal Economic Society, vol. 121(552), pages 505-532, May.
    8. Dholakia, Ruby Roy & Harlam, Bari, 1994. "Telecommunications and economic development: Econometric analysis of the US experience," Telecommunications Policy, Elsevier, vol. 18(6), pages 470-477, August.
    9. Holt, Lynne & Jamison, Mark, 0. "Broadband and contributions to economic growth: Lessons from the US experience," Telecommunications Policy, Elsevier, vol. 33(10-11), pages 575-581, November.
    10. Distaso, Walter & Lupi, Paolo & Manenti, Fabio M., 2006. "Platform competition and broadband uptake: Theory and empirical evidence from the European union," Information Economics and Policy, Elsevier, vol. 18(1), pages 87-106, March.
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    Cited by:

    1. Marek Dabrowski & Luc DeWulf, 2013. "Economic Development, Trade and Investment in the Eastern and Southern Mediterranean Region," CASE Network Reports 0111, CASE-Center for Social and Economic Research.
    2. Bilal Mehmood & Haider Mahmood, 2014. "Broadband-Growth Relationship in Asian Perspective: A Revisit Using System Generalized Method of Moments (GMM) and Panel Fully Modified Ordinary Least Squares (Pfmols)," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 2(6), pages 229-237, June.

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