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Telecommunications Dynamics, Output and Employment

Author

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  • Jungmittag, Andre

    () (FH Frankfurt)

  • Welfens, Paul J. J.

    () (University of Wuppertal)

Abstract

In EU countries, opening up of telecommunications markets and regulations have helped to reduce the price of digital services which is an important quasi-input factor in all firms. Integrating the use of telecommunications in a macroeconomic production function is the analytical starting point for our interdependent analysis of output, use of telecommunications and employment. Based on unit root and co-integration analysis as well as an error correction three-equation model which are estimated simultaneously, we present results both on long run links and short run links between telecommunications, output and employment. Considering various scenarios suggests that a fall in the relative price of telecommunications can generate a cumulated employment increase of 760,000 within seven years in Germany. The institutional setup for regulating telecommunications could be improved in Germany and other EU countries.

Suggested Citation

  • Jungmittag, Andre & Welfens, Paul J. J., 2006. "Telecommunications Dynamics, Output and Employment," IZA Discussion Papers 2379, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2379
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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.
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    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    4. Cronin, Francis J. & Parker, Edwin B. & Colleran, Elisabeth K. & Gold, Mark A., 1993. "Telecommunications infrastructure investment and economic development," Telecommunications Policy, Elsevier, vol. 17(6), pages 415-430, August.
    5. David T. Coe & Reza Moghadam, 1993. "Capital and Trade as Engines of Growth in France: An Application of Johansen's Cointegration Methodology," IMF Staff Papers, Palgrave Macmillan, vol. 40(3), pages 542-566, September.
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    7. Cronin, Francis J. & Colleran, Elisabeth K. & Herbert, Paul L. & Lewitzky, Steven, 1993. "Telecommunications and growth : The contribution of telecommunications infrastructure investment to aggregate and sectoral productivity," Telecommunications Policy, Elsevier, vol. 17(9), pages 677-690, December.
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    9. Andre Jungmittag, 2006. "Innovation dynamics in the EU: convergence or divergence? A cross-country panel data analysis," Empirical Economics, Springer, vol. 31(2), pages 313-331, June.
    10. Andres, Luis & Cuberes, David & Diouf, Mame Astou & Serebrisky, Tomas, 2007. "Diffusion of the internet : a cross-country analysis," Policy Research Working Paper Series 4420, The World Bank.
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    Cited by:

    1. Paul J.J. Welfens, 2014. "Competition in Telecommunications and Internet Services: Problems with Asymmetric Regulations," EIIW Discussion paper disbei205, Universitätsbibliothek Wuppertal, University Library.

    More about this item

    Keywords

    growth; employment; telecommunications; knowledge society; regulation;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General

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