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Broadband Infrastructure and Economic Growth

Author

Listed:
  • Nina Czernich
  • Oliver Falck
  • Tobias Kretschmer
  • Ludger Woessmann
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 raises 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

  • Nina Czernich & Oliver Falck & Tobias Kretschmer & Ludger Woessmann, 2009. "Broadband Infrastructure and Economic Growth," CESifo Working Paper Series 2861, CESifo.
    • Handle: RePEc:ces:ceswps:_2861
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    broadband; high-speed internet; technology diffusion; economic growth;
    All these keywords.

    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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