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

M. Ishaq Nadiri, Banani Nandi, Kemal Kivanc Akoz

    Research output: Contribution to journalArticle

    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.

    Original languageEnglish (US)
    Pages (from-to)433-451
    Number of pages19
    JournalTelecommunications Policy
    Volume42
    Issue number6
    DOIs
    StatePublished - Jul 2018

    Keywords

    • Broadband
    • Communications
    • Infrastructure
    • Marginal benefits
    • Productivity

    ASJC Scopus subject areas

    • Human Factors and Ergonomics
    • Information Systems
    • Electrical and Electronic Engineering

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