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A Retrospective Study on the Regional Benefits and Spillover Effects of High-Speed Broadband Networks: Evidence from German Counties

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  • Briglauer, Wolfgang
  • Dürr, Niklas
  • Gugler, Klaus

Abstract

There is still hardly any empirical evidence on how divergent broadband technologies, and, by extension, bandwidth levels, influence GDP growth, or on the extent of spatial externalities at a regional level. Our study aims to assess the economic benefits of high-speed broadband networks within and across neighbouring counties in Germany. Utilizing a balanced panel dataset of 401 German counties with data from 2010-2015 as well as different panel estimation techniques, we find that the availability of high-speed broadband (which enables transfer rates of 50 Mbit/sec and higher) has a small but significant positive effect on regional GDP growth in the average German county, when compared to normal broadband availability. Furthermore, we find that broadband deployment in German counties induces substantial economic benefits in terms of direct effects and regional externalities. According to our main estimation results, an increase in bandwidth coverage of 50 Mbit/sec and higher by one percentage point induces a rise in regional GDP of 0.05%. This effect is almost doubled if we also take regional externalities into account and is of particular relevance for urban counties. Furthermore, our cost-benefit analysis suggests substantial efficiency gains, as the total economic benefits of subsidy programs to encourage broadband expansion substantially exceeded their associated costs.

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  • Briglauer, Wolfgang & Dürr, Niklas & Gugler, Klaus, 2019. "A Retrospective Study on the Regional Benefits and Spillover Effects of High-Speed Broadband Networks: Evidence from German Counties," 30th European Regional ITS Conference, Helsinki 2019 205171, International Telecommunications Society (ITS).
    • Handle: RePEc:zbw:itse19:205171
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    3. Oughton, Edward J. & Amaglobeli, David & Moszoro, Marian, 2023. "What would it cost to connect the unconnected? Estimating global universal broadband infrastructure investment," Telecommunications Policy, Elsevier, vol. 47(10).
    4. Abrardi, Laura & Sabatino, Lorien, 2023. "Ultra-broadband investment and economic resilience: Evidence from the Covid-19 pandemic," Telecommunications Policy, Elsevier, vol. 47(2).
    5. Christoph Grimpe & Wolfgang Sofka & Ulrich Kaiser, 2023. "Competing for digital human capital: The retention effect of digital expertise in MNC subsidiaries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(4), pages 657-685, June.
    6. Han, Luyi & Wojan, Timothy R. & Goetz, Stephan J., 2024. "Cloud computing and rural globalization: Evidence for the U.S. nonfarm economy," Telecommunications Policy, Elsevier, vol. 48(8).
    7. Briglauer, Wolfgang & Cambini, Carlo & Gugler, Klaus, 2023. "Economic benefits of high-speed broadband network coverage and service adoption: Evidence from OECD member states," Research Papers 23, EcoAustria – Institute for Economic Research.
    8. Cambini, Carlo & Grinza, Elena & Sabatino, Lorien, 2023. "Ultra-fast broadband access and productivity: Evidence from Italian firms," International Journal of Industrial Organization, Elsevier, vol. 86(C).
    9. Qing Li & Yanrui Wu, 2023. "ICT, technological diffusion and economic growth in Chinese cities," Empirical Economics, Springer, vol. 64(4), pages 1737-1768, April.
    10. Ndubuisi, Gideon & Otioma, Chuks & Owusu, Solomon & Tetteh, Godsway Korku, 2022. "ICTs quality and technical efficiency: An empirical analysis," Telecommunications Policy, Elsevier, vol. 46(10).
    11. Andrés Arronte Ledo & Adelheid Holl, 2023. "Ultrahigh‐Speed Fixed Broadband and Rural Development," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 114(5), pages 479-500, December.
    12. Manica, Luis & Damásio, Bruno & Mendonça, Sandro, 2024. "State aid for broadband network deployment: National and subnational governance mechanisms, 2003–2023," Telecommunications Policy, Elsevier, vol. 48(9).
    13. Vitor Miguel Ribeiro & Lei Bao, 2021. "Impact of next‐generation access networks on the innovation efficiency of Portuguese municipalities: A spatial econometrics approach," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(5), pages 1615-1637, October.

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    More about this item

    Keywords

    High-speed broadband infrastructure; economic growth; spatial externalities; German counties; panel data;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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