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Does broadband speed really matter for driving economic growth? Investigating OECD countries

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  • Rohman, Ibrahim Kholilul
  • Bohlin, Erik

Abstract

This paper aims to measure the impact of broadband speed on economic growth in the OECD countries. The macroeconomic indicators for this study were collected from OECD databases, except for the speed data, which were gathered from Ookla, a company that provides broadband testing and web-based network diagnostic applications data on a daily basis. With this, quarterly balanced panel data for 34 OECD countries during the period 2008-2010 were examined. The study found that the estimated coefficient of broadband speed is statistically significant. Doubling the broadband speed will contribute to 0.3% growth compared with the growth rate in the base year. The results convey that the impact of increasing broadband speed on GDP growth will largely depend on two aspects: (i) the size of the coefficient of the broadband speed (beta) and (ii) the existing economic growth in each country. Consequently, since the coefficient is linear, the impact will also be relatively greater for countries that experienced lower economic growth during previous years. Finally, the paper provides suggestions for future research in this vein and further calibration of future models.

Suggested Citation

  • Rohman, Ibrahim Kholilul & Bohlin, Erik, 2012. "Does broadband speed really matter for driving economic growth? Investigating OECD countries," 23rd European Regional ITS Conference, Vienna 2012 60385, International Telecommunications Society (ITS).
  • Handle: RePEc:zbw:itse12:60385
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    File URL: https://www.econstor.eu/bitstream/10419/60385/1/72027561X.pdf
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    References listed on IDEAS

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    1. Stenberg, Peter L. & Morehart, Mitchell J. & Cromartie, John, 2009. "Broadband Internet Service Helping Create a Rural Digital Economy," Amber Waves, United States Department of Agriculture, Economic Research Service, September.
    2. Bronwyn HOWELL & Arthur GRIMES, 2010. "Productivity Questions for Public Sector Fast Fibre Network Financiers," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(78), pages 127-146, 2nd quart.
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    Cited by:

    1. Howell, Bronwyn, 2012. "Competition and Regulation Policy in Antipodean Government-Funded UltraFast Fibre Broadband Markets," Working Paper Series 4133, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    2. Kongaut, Chatchai & Bohlin, Erik, 2014. "Impact of broadband speed on economic outputs: An empirical study of OECD countries," 25th European Regional ITS Conference, Brussels 2014 101415, International Telecommunications Society (ITS).
    3. Juan Jung & Enrique López-Bazo, 2017. "On the regional impact of broadband on productivity: the case of Brazil," IREA Working Papers 201708, University of Barcelona, Research Institute of Applied Economics, revised May 2017.
    4. Prieger, James E., 2013. "The broadband digital divide and the economic benefits of mobile broadband for rural areas," Telecommunications Policy, Elsevier, vol. 37(6), pages 483-502.
    5. Ferdinand Pavel & Yann Girard & Arno Hantzsche & Anselm Mattes & Julius Pahlke & Katherina Peter, 2014. "Wachstumsfaktor Telekommunikation: zum Beitrag der Telekommunikationsbranche zur wirtschaftlichen Entwicklung in Deutschland; Endbericht," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 78, number pbk78.
    6. Gruber, H. & Hätönen, J. & Koutroumpis, P., 2013. "Broadband access in the EU: An assessment of future economic benefits," 24th European Regional ITS Conference, Florence 2013 88492, International Telecommunications Society (ITS).
    7. Howell, Bronwyn, 2011. "Competition and Regulation Policy in Antipodean Government-Funded Ultrafast Broadband Network Markets," Working Paper Series 4099, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    8. Brito, Duarte & Tselekounis, Markos, 2016. "Access regulation and the entrant's mode of entry under multi-product competition in telecoms," Information Economics and Policy, Elsevier, vol. 37(C), pages 20-33.

    More about this item

    Keywords

    broadband; speed; economic growth; OECD; panel data; fixed effect; advertised speed; measured speed;

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