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

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 tradi...

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Bibliographic Details
Published in:Telecommunications policy 2018-07, Vol.42 (6), p.433-451
Main Authors: Nadiri, M. Ishaq, Nandi, Banani, Akoz, Kemal Kivanc
Format: Article
Language:English
Subjects:
Access
Broadband
Broadband communication systems
Capital
Communication
Communications
Computer networks
Impact analysis
Industrial production
Infrastructure
Investments
Labor process
Marginal benefits
Penetration
Productivity
Rates of return
Social capital
Spillover effect
Technology
Telecommunications policy
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Summary: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.
ISSN:0308-5961
1879-3258
DOI:10.1016/j.telpol.2018.03.008