Broadband Infrastructure and Economic Growth

Broadband Infrastructure and Economic Growth

February 26, 2009 | Czernich, Nina; Falck, Oliver; Kretschmer, Tobias; Woessmann, Ludger
This paper examines the impact of broadband infrastructure on economic growth in OECD countries from 1996 to 2007. Using an instrumental-variable (IV) approach, the authors estimate that a 10 percentage point increase in broadband penetration raises annual per-capita growth by 0.9-1.5 percentage points. The study employs a logistic diffusion model where pre-existing voice-telephony and cable-TV networks predict maximum broadband penetration, addressing potential endogeneity issues. The results are robust to country and year fixed effects and control for linear second-stage effects of the instruments. The authors also verify that their instruments predict broadband penetration but not the diffusion of contemporaneous technologies like mobile telephony and computers, confirming the validity of their findings. The paper concludes by discussing the implications of broadband infrastructure for economic growth and the potential for further research.This paper examines the impact of broadband infrastructure on economic growth in OECD countries from 1996 to 2007. Using an instrumental-variable (IV) approach, the authors estimate that a 10 percentage point increase in broadband penetration raises annual per-capita growth by 0.9-1.5 percentage points. The study employs a logistic diffusion model where pre-existing voice-telephony and cable-TV networks predict maximum broadband penetration, addressing potential endogeneity issues. The results are robust to country and year fixed effects and control for linear second-stage effects of the instruments. The authors also verify that their instruments predict broadband penetration but not the diffusion of contemporaneous technologies like mobile telephony and computers, confirming the validity of their findings. The paper concludes by discussing the implications of broadband infrastructure for economic growth and the potential for further research.
Reach us at info@study.space