Broadband Infrastructure and Economic Growth

By Nina Czernich, Oliver Falck, Tobias Kretschmer, Ludger Woessmann. Social Science Research Network, 2011

1,288 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Media Technology

View Paper: https://www.semanticscholar.org/paper/8ea2299eaf9bf1fd46ecfecb04814d0a418f1aa4

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Citations in the corpus

Greasing the Wheels of Change: Bribery, Institutions, and New Product Introductions in Emerging Markets (2019, background): “Information technology (IT) infrastructure spurs the diffusion of technology across borders with positive effects on creation of novel products (Czernich et al., 2011).”
ICT and economic growth : comparing developing, emerging and developed countries (2018, positive): “Czernich et al. (2011) support the ﬁnding by Roller and Waverman (2001) on the importance of communication technology.”
Jobs for Shared Prosperity: Time for Action in the Middle East and North Africa (2013, background): “Source: Rossotto 2011; Katz et al. 2010; Analysis Mason 2010; McKinsey 2010; Qiang and Rossotto 2009; and Czernich et al. 2009.”
Middle-Income Growth Traps (2012, result): “It is also consistent with the evidence in Czernich et al. (2011) for instance, who found that broadband matters for growth only above a threshold penetration rate (measured as the number of broadband subscribers per 100 inhabitants) of 10 percent.”
Social Media and Corruption (2018, background): “A number of recent works identifies the impact of broadband penetration on economic growth (e.g. Czernich et al. 2011), voting behavior (Miner 2012, Falck, Gold, and Heblich 2013, Larcinese and Miner 2013, Campante, Durante, and Sobbrio 2014), sexual crime rates (Bhuller et al. 2013), or policy…”
The Employment and Wage Impact of Broadband Deployment in Canada (2015, positive): “3See, for example, ?. 4Broadband first appeared in Canada in 1997 (Czernich et al., 2011). data challenges, but the key empirical challenge is to credibly identify a causal effect from broadband deployment to economic activity.”
ICTs: Do they contribute to increased carbon emissions? (2012, neutral): “It is widely accepted that ICT investment leads to real-world productivity gains [27,11].”
Broadband Internet and New Firm Location Decisions in Rural Areas (2017, neutral): “Gillett et al. (2006), Shideler, Badasyan, and Taylor (2007), Crandall, Lehr, and Litan (2007), Koutroumpis (2009), Czernich et al. (2011), Kolko (2012), and Atasoy (2013) all found that broadband deployment is positively associated with economic growth.”
Caught in the Middle? The Economics of Middle-Income Traps (2017, neutral): “…investments in general, and the nonlinearities associated with the benefits of advanced infrastructure in particular (as is the case for broadband networks documented by Czernich et al. (2011), for instance), the increase in spending in that category of investments may well need to be substantial.”