DOI: 10.1257/aer.91.4.909 ISSN:
Telecommunications Infrastructure and Economic Development: A Simultaneous Approach
Lars-Hendrik Röller, Leonard Waverman- Economics and Econometrics
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. (JEL O57, O47, L69)