IDEAS home Printed from https://ideas.repec.org/a/eee/iepoli/v57y2021ics016762452100024x.html
   My bibliography  Save this article

Broadband Infrastructure and Economic Growth in Rural Areas

Author

Listed:
  • Aldashev, Alisher
  • Batkeyev, Birzhan

Abstract

Using unique data from a systematic roll-out of broadband infrastructure in rural areas, we provide evidence on the impact of high-speed internet via broadband on three main sectors of economy: retail, agriculture, and manufacturing. Our instrumental variable model, which relies upon the timing of the roll-out at the first stage, shows that in general broadband access does not foster economic growth, but positively affects the retail sector, with no effect on the manufacturing and agricultural sectors. We also find that the biggest effects are found for speeds below 10 Mbps. We supplement our findings by exploring potential mechanisms that could drive the results.

Suggested Citation

  • Aldashev, Alisher & Batkeyev, Birzhan, 2021. "Broadband Infrastructure and Economic Growth in Rural Areas," Information Economics and Policy, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:iepoli:v:57:y:2021:i:c:s016762452100024x
    DOI: 10.1016/j.infoecopol.2021.100936
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S016762452100024X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.infoecopol.2021.100936?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anders Akerman & Ingvil Gaarder & Magne Mogstad, 2015. "The Skill Complementarity of Broadband Internet," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1781-1824.
    2. Gibbons, Stephen & Lyytikäinen, Teemu & Overman, Henry G. & Sanchis-Guarner, Rosa, 2019. "New road infrastructure: The effects on firms," Journal of Urban Economics, Elsevier, vol. 110(C), pages 35-50.
    3. Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, vol. 91(4), pages 909-923, September.
    4. Nina Czernich & Oliver Falck & Tobias Kretschmer & Ludger Woessmann, 2011. "Broadband Infrastructure and Economic Growth," Economic Journal, Royal Economic Society, vol. 121(552), pages 505-532, May.
    5. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    6. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
    7. Koutroumpis, Pantelis, 2009. "The economic impact of broadband on growth: A simultaneous approach," Telecommunications Policy, Elsevier, vol. 33(9), pages 471-485, October.
    8. Czernich, Nina, 2014. "Does broadband internet reduce the unemployment rate? Evidence for Germany," Information Economics and Policy, Elsevier, vol. 29(C), pages 32-45.
    9. Alicia H. Munnell, 1992. "Policy Watch: Infrastructure Investment and Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 189-198, Fall.
    10. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413, November.
    11. Parker, Edwin B., 2000. "Closing the digital divide in rural America," Telecommunications Policy, Elsevier, vol. 24(4), pages 281-290, May.
    12. Chaudhuri, Anindya & Flamm, Kenneth S. & Horrigan, John, 0. "An analysis of the determinants of internet access," Telecommunications Policy, Elsevier, vol. 29(9-10), pages 731-755, October.
    13. Aggarwal, Shilpa, 2018. "Do rural roads create pathways out of poverty? Evidence from India," Journal of Development Economics, Elsevier, vol. 133(C), pages 375-395.
    14. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    15. Banerjee, Abhijit & Duflo, Esther & Qian, Nancy, 2020. "On the road: Access to transportation infrastructure and economic growth in China," Journal of Development Economics, Elsevier, vol. 145(C).
    16. Bertschek, Irene & Cerquera, Daniel & Klein, Gordon J., 2011. "More bits - more bucks? Measuring the impact of broadband internet on firm performance," ZEW Discussion Papers 11-032, ZEW - Leibniz Centre for European Economic Research.
    17. Mariscal, Judith, 0. "Digital divide in a developing country," Telecommunications Policy, Elsevier, vol. 29(5-6), pages 409-428, June.
    18. Anusua Datta & Sumit Agarwal, 2004. "Telecommunications and economic growth: a panel data approach," Applied Economics, Taylor & Francis Journals, vol. 36(15), pages 1649-1654.
    19. Tim Kelly & Carlo Maria Rossotto, 2012. "Broadband Strategies Handbook," World Bank Publications - Books, The World Bank Group, number 6009.
    20. James E. Prieger, 2003. "The Supply Side of the Digital Divide: Is There Equal Availability in the Broadband Internet Access Market?," Economic Inquiry, Western Economic Association International, vol. 41(2), pages 346-363, April.
    21. LaRose, Robert & Gregg, Jennifer L. & Strover, Sharon & Straubhaar, Joseph & Carpenter, Serena, 0. "Closing the rural broadband gap: Promoting adoption of the Internet in rural America," Telecommunications Policy, Elsevier, vol. 31(6-7), pages 359-373, July.
    22. James E. Prieger, 2003. "The Supply Side of the Digital Divide: Is There Equal Availability in the Broadband Internet Access Market?," Economic Inquiry, Western Economic Association International, vol. 41(2), pages 346-363, April.
    23. Madden, Gary & Savage, Scott J., 1998. "CEE telecommunications investment and economic growth," Information Economics and Policy, Elsevier, vol. 10(2), pages 173-195, June.
    24. Prieger, James E. & Hu, Wei-Min, 2008. "The broadband digital divide and the nexus of race, competition, and quality," Information Economics and Policy, Elsevier, vol. 20(2), pages 150-167, June.
    25. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    26. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bai, Yang & Wang, Ryan Yang & Jayakar, Krishna, 2022. "What $2.5 billion can buy: The effect of the Broadband Initiatives Program on farm productivity," Telecommunications Policy, Elsevier, vol. 46(7).
    2. Xiang, Panwei & Wei, Muhua & Liu, Huili & Wu, Lianren & Qi, Jiayin, 2024. "How does technological value drive 6G development? Explanation from a systematic framework," Telecommunications Policy, Elsevier, vol. 48(7).
    3. Shunbin Zhong & Mengding Li & Yihui Liu & Yun Bai, 2023. "Do Internet Development and Urbanization Foster Regional Economic Growth: Evidence from China’s Yangtze River Economic Belt," Sustainability, MDPI, vol. 15(12), pages 1-14, June.
    4. Wang, Chong & Wang, Lei, 2024. "Does broadband infrastructure promote urban innovation? Evidence from “Broadband China” demonstration policy," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 349-362.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bertschek, Irene & Briglauer, Wolfgang & Hüschelrath, Kai & Kauf, Benedikt & Niebel, Thomas, 2016. "The economic impacts of telecommunications networks and broadband internet: A survey," ZEW Discussion Papers 16-056, ZEW - Leibniz Centre for European Economic Research.
    2. Stockinger, Bastian, 2017. "The effect of broadband internet on establishments' employment growth: evidence from Germany," IAB-Discussion Paper 201719, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Briglauer, Wolfgang & Dürr, Niklas S. & Falck, Oliver & Hüschelrath, Kai, 2019. "Does state aid for broadband deployment in rural areas close the digital and economic divide?," Information Economics and Policy, Elsevier, vol. 46(C), pages 68-85.
    4. Nina Czernich, 2011. "The emergence of broadband internet and consequences for economic and social development," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 37.
    5. Mora-Rivera, Jorge & García-Mora, Fernando, 2021. "Internet access and poverty reduction: Evidence from rural and urban Mexico," Telecommunications Policy, Elsevier, vol. 45(2).
    6. Jung, Juan & López-Bazo, Enrique, 2020. "On the regional impact of broadband on productivity: The case of Brazil," Telecommunications Policy, Elsevier, vol. 44(1).
    7. Donou-Adonsou, Ficawoyi, 2019. "Technology, education, and economic growth in Sub-Saharan Africa," Telecommunications Policy, Elsevier, vol. 43(4), pages 353-360.
    8. Cariolle, Joël, 2021. "International connectivity and the digital divide in Sub-Saharan Africa," Information Economics and Policy, Elsevier, vol. 55(C).
    9. Briglauer, Wolfgang & Gugler, Klaus, 2018. "Go for gigabit? First evidence on economic benefits of (ultra-)fast broadband technologies in Europe," ZEW Discussion Papers 18-020, ZEW - Leibniz Centre for European Economic Research.
    10. Sawng, Yeong-wha & Kim, Pang-ryong & Park, JiYoung, 2021. "ICT investment and GDP growth: Causality analysis for the case of Korea," Telecommunications Policy, Elsevier, vol. 45(7).
    11. Jung, Juan, 2014. "Regional inequalities in the impact of broadband on productivity: Evidence from Brazil," MPRA Paper 56177, University Library of Munich, Germany.
    12. Elena Toader & Bogdan Narcis Firtescu & Angela Roman & Sorin Gabriel Anton, 2018. "Impact of Information and Communication Technology Infrastructure on Economic Growth: An Empirical Assessment for the EU Countries," Sustainability, MDPI, vol. 10(10), pages 1-22, October.
    13. Falck, Oliver & Heimisch-Roecker, Alexandra & Wiederhold, Simon, 2021. "Returns to ICT skills," Research Policy, Elsevier, vol. 50(7).
    14. Ferdinand Pavel & Yann Girard & Arno Hantzsche & Anselm Mattes & Julius Pahlke & Katherina Peter, 2014. "Wachstumsfaktor Telekommunikation: zum Beitrag der Telekommunikationsbranche zur wirtschaftlichen Entwicklung in Deutschland; Endbericht," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 78, number pbk78, April.
    15. Sevgi Sezer & Tezcan Abasiz, 2017. "The Impact Of Logistics Industry On Economic Growth: An Application In Oecd Countries," Eurasian Journal of Social Sciences, Eurasian Publications, vol. 5(1), pages 11-23.
    16. Zhaofang Chu, 2012. "Logistics and economic growth: a panel data approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(1), pages 87-102, August.
    17. Prieger, James E., 2013. "The broadband digital divide and the economic benefits of mobile broadband for rural areas," Telecommunications Policy, Elsevier, vol. 37(6), pages 483-502.
    18. Tang, Chor Foon & Abosedra, Salah, 2019. "Logistics performance, exports, and growth: Evidence from Asian economies," Research in Transportation Economics, Elsevier, vol. 78(C).
    19. Faris Alshubiri, 2020. "Analysis of the Financial Model of the ICT Price Basket on Financial Development Indicators of GCC Countries," The Review of Socionetwork Strategies, Springer, vol. 14(1), pages 147-170, April.
    20. Calvin Jones & Dylan Henderson, 2019. "Broadband and uneven spatial development: The case of Cardiff City-Region," Local Economy, London South Bank University, vol. 34(3), pages 228-247, May.

    More about this item

    Keywords

    Broadband; Economic Growth; Rural Areas;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iepoli:v:57:y:2021:i:c:s016762452100024x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505549 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.