The Effects of Broadband Infrastructure on Economic Growth in Developing Countries

In this paper we investigate the effects of broadband infrastructure providing high speed internet, on economic growth in developing countries. We have used two different broadband measures to classify developing countries into two groups for the period 1999-2008. By using logistic diffusion model and IV approach, a nonlinear diffusion model is specified. Differences in ceiling of diffusion curve of this technology across countries are defined by pre-existing telephone networks. Then, after predicting broadband penetration rates through the diffusion curve and controlling for fixed effects, the effects of introduction and distribution of broadband on economic growth are estimated. The results indicate that these effects are significant and positive.