The Impact of Broadband Infrastructure on Economic Growth in Some Arab and Emerging Countries

Infrastructure investments expansion typically adds to the productive capacity in an economy, and thus to its economic growth. Network industries account for between one–tenth and onequarter of economy wide investments (OECD 2009 B). Telecom industry is one of the network industries, and broadband is a new technology that is widely used all over the world. It is the popular mode of access to the internet, as it refers to high speed internet access. This study aims at examining the impact of broadband infrastructure on economic growth in emerging countries and Arab countries. In addition, the impact of competition in telecom sector has been included in the growth equation estimated to control for the effect of competition in telecom sector, and thus broadband, on the economic growth in these countries. The empirical study reaches a conclusion in line with previous studies that there is a positive impact of broadband uptake on economic growth. In addition, the contribution of this paper is also in the construction of the competition index which was statistically insignificant, but became significant once we controlled for FDI as a percent of GDP. Thus, governments should create an enabling environment and open their markets for more competition in order to induce the establishments of more broadband and telecom networks in their respective countries.