How important are mobile broadband networks for the global economic development?

•We find a statistically significant effect from mobile broadband (MBB) on GDP.•A 10 percent increase in MBB adoption causes a 0.8 percent increase in GDP.•The economic effect from MBB gradually decreases over time.•The effect from MBB is smaller in OECD-countries compared to the rest of the world. Since the beginning of the 21st century mobile broadband has diffused very rapidly in many countries around the world. This paper investigates to what extent the diffusion of mobile broadband has impacted economic development in terms of GDP. The study is based on data for 135 countries (90 countries once controlling for capital, employment and human capital) for the period 2002–2014. The results show that there is a statistically significant effect from mobile broadband on GDP both when mobile broadband is first introduced and gradually as mobile broadband diffuses throughout different economies. Based on a two stage model we are able to conclude that on average a 10 percent increase of mobile broadband adoption causes a 0.8 percent increase in GDP. Moreover, once we control for the years since mobile broadband was introduced, we find that the economic effect gradually decreases over time. For the country with median average growth of mobile broadband penetration, this implies that the economic effect has disappeared 6 years after introduction (if introduction is defined as a mobile penetration of 1 percent).