Broadband infrastructure and economic growth

Czernich, Nina; Falck, Oliver; Kretschmer, Tobias und Wößmann, Ludger (2009): Broadband infrastructure and economic growth. CESifo Working Paper,

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.

• Item Type: Paper
• Faculties: Economics; Economics > Chairs > CESifo-Professorship for Empirical Innovation Economics
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: O47, L96, K23
• Language: English