Impact of modern communication infrastructure on productivity, production structure and factor demands of US industries: Impact revisited

M. Ishaq Nadiri, Banani Nandi and Kemal Kivanc Akoz (kakoz@hse.ru)

Telecommunications Policy, 2018, vol. 42, issue 6, 433-451

Abstract: This study investigates the contribution of modern communication infrastructure characterized by high speed broadband access network on the productivity growth, production structure and factor demands for US industries and for the aggregate economy. To evaluate such contribution, we modify the traditional cost function by incorporating communication infrastructure as input in production process in conjunction with other public infrastructures. The network externality and spillover effect of broadband access technology are captured by introducing broadband penetration rate as a shift factor in industry level production function. Empirical results show that the increased use of modern communications infrastructure increases the productivity of all industries with wide variations across industries. Estimated impacts on input demands show that increase in use of communications infrastructure service saves labor and materials and increase the demand for private capital. Finally, aggregate social rate of return on such investment has been estimated for policy implications.

Keywords: Communications; Broadband; Infrastructure; Marginal benefits; Productivity (search for similar items in EconPapers)
JEL-codes: D2 D24 L86 L96 O47 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:telpol:v:42:y:2018:i:6:p:433-451

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DOI: 10.1016/j.telpol.2018.03.008

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