BROADBAND INFRASTRUCTURE AND ECONOMIC GROWTH: A PANEL DATA APPROACH FOR SELECTED COUNTRIES

The world economy is increasingly becoming digital. The internet not only provides a faster and more reliable communication along the supply chain, but also expands the market for the firms by creating better opportunities to communicate with new customers. As literature stresses, broadband infrastructure stimulates total factor productivity by reducing the transaction costs of communication, leading to a higher GDP growth. In this paper, we analyze the effect of broadband subscriptions on GDP per capita using data for 57 countries covering the 2001-2016 period .By employing the dynamic GMM (Generalized Method of Moment) estimator between the years 2001-2016 for selected countries, we found the positive relationship between the broadband infrastructure and economic growth for these countries. The results indicate that the number of internet users also promotes GDP per capita. In this respect, states are advised to direct resources to broadband infrastructure with an aim to provide high quality, accessible and affordable telecommunication.