Measuring (in a time of crisis) the impact of broadband connections on economic growth: an OECD panel analysis

Technological innovation has Always been considered a major stimulus for economic growth. Highspeed internet access via broadband infrastructure has undergone rapid development since the end of the 1990s, thanks to the deployment of both fixed and mobile technologies. The present study investigates the impact of fixed broadband diffusion as a technological determinant of economic growth on the basis of a panel of 23 OECD countries over 15 years (1996–2010). The time horizonchosen is suitablefor verification ofthe causal effectongrowthof the transition from traditionalcoppertopartiallyfibrenetworks.Throughimplementationofadynamicpanelbyusing thegeneralizedmethodofmoments(GMM)combinedwithaninstrumentalvariable(IV)two-stage approach, we found a positive correlation between broadband diffusion and economic growth, even after controlling for countries initial endowment of information and communication technologies (ICT) and for the years of economic crisis. Our main finding provides evidence, through a continuoustimeinterpretationofourestimations,ofaquantitativelyrelevantrelationshipbetween broadbanddiffusionandeconomicdynamicsintheshort,mediumandlongruns.Ourfindingsmay be useful to policy makers in that they permit forecasting of the benefits of further transition from broadband to ultra-wide broadband networks.