A retrospective study on the regional benefits and spillover effects of high-speed broadband networks: Evidence from German counties

Abstract

There is still hardly any empirical evidence on how divergent broadband technologies, and, by extension, bandwidth levels, influence GDP growth, or on the extent of spatial externalities at a regional level. Our study aims to assess the economic benefits of high-speed broadband networks within and across neighbouring counties in Germany. Utilizing a balanced panel dataset of 401 German counties with data from 2010-2015 as well as different panel estimation techniques, we find that the availability of high-speed broadband (which enables transfer rates of 50 Mbit/sec and higher) has a small but significant positive effect on regional GDP growth in the average German county, when compared to normal broadband availability. Furthermore, we find that broadband deployment in German counties induces substantial economic benefits in terms of direct effects and regional externalities. According to our main estimation results, an increase in bandwidth coverage of 50 Mbit/sec and higher by one percentage point induces a rise in regional GDP of 0.05%. This effect is almost doubled if we also take regional externalities into account and is of particular relevance for urban counties. Furthermore, our cost-benefit analysis suggests substantial efficiency gains, as the total economic benefits of subsidy programs to encourage broadband expansion substantially exceeded their associated costs.

Impact of next‐generation access networks on the innovation efficiency of Portuguese municipalities: A spatial econometrics approach

“…This fact, combined with the evidence supported by a fraction of the economic literature relative to the observation of a positive relationship between penetration of improved vital inputs and regional growth (Briglauer et al, 2019), leads to the formulation of the following hypothesis :Hypothesis Additional coverage of NGA networks has ambiguous impact on the innovation efficiency of Portuguese municipalities in the direct channel .…”

“…Although the content of this research is innovative owing to the lack of studies focused on analyzing spatial–temporal effects of broadband access, Briglauer et al (2019) conducted a unique study previous to ours that uses broadband connectivity data at the municipal level in research applied to Germanic municipalities. In relation to the impact of broadband technologies on regional gross domestic product (GDP) growth for different bandwidth levels, they find that the availability of ultra‐fast broadband has a small but significant positive effect on regional GDP growth of the mean German county compared with the normal broadband availability.…”

“…In particular, an increase in bandwidth coverage of 50 Mbps or higher by one percentage point induces a rise in regional GDP of 0.05%. Nevertheless, one should highlight that Briglauer et al (2019) aimed to assess the economic impact of fast and ultra‐fast broadband availability on regional GDP growth without resorting to spatial econometrics models, which means that each German county is viewed as an independent black box. This differs from evaluating the impact of NGA technologies on the innovation efficiency of LAUs when spatial interaction effects are specified in the regression model.…”

Infrastructure for Digital Connectivity

“…The positive economic impact associated with broadband availability and increased broadband speed has also been evident at a regional level. Briglauer et al (2021), in a study of 401 German counties over the period 2010 to 2015, find that an increase in average broadband speed had a significantly positive effect on county-level GDP, with an increase in average bandwidth speed by one unit (1 Mpbs) bringing about a rise in county-level GDP of 0.18%. What is more, when positive regional externalities across counties are taken into account, the effect is almost doubled (0.31%).…”

Sharing digital infrastructure use by mobile providers: Investment solutions for sparsely populated territories of the Russian Federation

“…В исследовании [Briglauer, Dürr, 2020] широкополосная связь также рассматривается в качестве драйвера развития, но не проводится различий по ее качеству и типу . В работах [Briglauer, Gugler, 2019;Layton, Potgieter, 2021] тестируется воздействие широкополосного доступа к оптоволоконному Интернету на экономические показатели .…”