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American Economic Review Vol. 91 No. 4 2001

Telecommunications Infrastructure and Economic Development: A Simultaneous Approach

Lars-Hendrik Röller1; Leonard Waverman2

1 Research Area IV/2, Wissenschaftszentrum Berlin (WZB), Reichpietschufer 50, 10785 Berlin, Germany, Humboldt University, and INSEAD. · 2 Department of Economics, London Business School, London NW1 YSA, England, and University of Toronto.

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.

DOI
10.1257/aer.91.4.909
Volume
91
Issue
4
Pages
909-923
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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