Does broadband speed really matter as a driver of economic growth? Investigating OECD countries

Abstract

This paper aims to measure the impact of broadband speed on economic growth in the OECD countries. All the variables used in this study were collected from OECD databases, except the speed data, which were gathered from Ookla, a company that provides broadband testing and web-based network diagnostic applications data on a daily basis. Quarterly balanced panel data for 33 OECD countries during the period 2008-2010 were examined. The study found that the estimated coefficient of broadband speed is statistically significant. The hypothetical result of this study shows that doubling the broadband speed will contribute 0.3% growth compared with the growth rate for the base year. The results convey that the impact of increasing broadband speed on GDP growth will largely depend on two aspects: 1) the size of the coefficient of the broadband speed (s); 2) the existing economic growth in each country. Finally, the paper provides suggestions for future research in this vein and further calibration of future models.