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American Economic Review: Vol. 91 No. 4 (September 2001)

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Telecommunications Infrastructure and Economic Development: A Simultaneous Approach

Article Citation

Roller, Lars-Hendrik, and Leonard Waverman. 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach." American Economic Review, 91(4): 909-923.

DOI: 10.1257/aer.91.4.909

Abstract

In this paper we investigate how telecommunications infrastructure affects economic growth. We use evidence from 21 OECD countries over a 20-year period to examine the impacts that telecommunications developments may have had. We jointly estimate a micromodel for telecommunication investment with a macro production function. We find evidence of a significant positive causal link, especially when a critical mass of telecommunications infrastructure is present. Interestingly, the critical mass appears to be at a level of telecommunications infrastructure that is near universal service.

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Authors

Roller, Lars-Hendrik (Wissenschaftszentrum Berlin, Humboldt U, and INSEAD)
Waverman, Leonard (London Business School and U Toronto)

JEL Classifications

O47: Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
L96: Telecommunications
O33: Technological Change: Choices and Consequences; Diffusion Processes
H54: National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock


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