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Broadband Infrastructure and Economic Growth

Author

Listed:
  • Czernich, Nina
  • Falck, Oliver
  • Kretschmer, Tobias
  • Wößmann, Ludger

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.

Suggested Citation

  • Czernich, Nina & Falck, Oliver & Kretschmer, Tobias & Wößmann, Ludger, 2011. "Broadband Infrastructure and Economic Growth," Munich Reprints in Economics 20033, University of Munich, Department of Economics.
  • Handle: RePEc:lmu:muenar:20033
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    More about this item

    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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