Does Broadband Speed Really Matter for Driving Economic Growth? Investigating OECD Countries

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper aims to measure the impact of broadband speed on economic growth in the OECD countries. The macroeconomic indicators for this study were collected from OECD databases, except for the speed data, which were gathered from Ookla, a company that provides broadband testing and web-based network diagnostic applications data on a daily basis. With this, quarterly balanced panel data for 34 OECD countries during the period 2008-2010 were examined. The study found that the estimated coefficient of broadband speed is statistically significant. Doubling the broadband speed will contribute to 0.3% growth compared with the growth rate in the base year. The results convey that the impact of increasing broadband speed on GDP growth will largely depend on two aspects: (i) the size of the coefficient of the broadband speed (beta) and (ii) the existing economic growth in each country. Consequently, since the coefficient is linear, the impact will also be relatively greater for countries that experienced lower economic growth during previous years. Finally, the paper provides suggestions for future research in this vein and further calibration of future models.

How important are mobile broadband networks for the global economic development?

“…Based on different specifications Koutroumpis (2009) found broadband penetration to have a significant impact on GDP growth ranging from 0.3 to 0.9 percent in 15 EU-countries. Rohman and Bohlin (2012) also found that a doubling of broadband speed contributed 0.3 percentage points to growth compared with growth in the base year. Williams et al (2012) is one of the few studies thus far that has investigated the impact of 3G penetration on economic growth.…”

Broadband access in the EU: An assessment of future economic benefits

“…We are still therefore at an early stage in terms of gathering evidence of faster broadband's incremental impacts -over and above the impacts of broadband in general. Rohman and Bohlin (2012) undertook one of the first attempts to measure the impact on broadband speed on economic growth, utilising a combination of OECD data for 33 countries over the period 2008-2010 and a proprietary speed testing dataset. Their regression analysis found that the coefficient of average achieved downstream broadband speed was not statistically significant, but that the coefficient of broadband speed squared was significant and positive -suggesting a non-linear relationship between broadband speeds and GDP per capita growth.…”

The broadband digital divide and the economic benefits of mobile broadband for rural areas

“…Other estimates of net or gross consumer surplus from broadband include work byGoolsbee and Klenow (2006) andRosston et al (2010).29 See also the four other non-peer reviewed studies cited inTable 1ofRohman and Bohlin (2012), claiming to find broadband investment multipliers of 1.45 to 3.6.…”