Fixed Broadband Penetration and Economic Growth Evidence from panel data of ASEAN member countries

Main Article Content

Yudi Purnama Purnama

Keywords

ASEAN, Economic growth, fixed broadband, Granger causality, gross capital accumulation

Abstract

This study explores causal relationships between fixed broadband penetration, gross capital accumulation, the degree of urbanisation, and economic growth, using panel data from 9 ASEAN member countries in 2003-2016. Employing multivariate models, we reveal bidirectional causality between fixed broadband penetration and economic growth, with a higher magnitude of effect from GDP per capita to broadband penetration. Furthermore, fixed broadband penetration has bidirectional causality to urbanisation, while a unidirectional link exists from fixed broadband penetration to gross capital accumulation.

Abstract 113 | 151-Article Text-PDF Downloads 1

References

Akaike, H. 1974. 'A new look at the statistical model identification'. IEEE Transactions on Automatic Control, 19(6), 716–723. https://doi.org/10.1109/TAC.1974.1100705
Arvin, BMM; Pradhan, RP. 2014. 'Broadband penetration and economic growth nexus: evidence from cross-country panel data'. Applied Economics, 46(35), 4360–4369. https://doi.org/10.1080/00036846.2014.957444
Asean.org. 2008. Bali Declaration in Forging Partnership to Advance High Speed Connection to Bridge Digital Divide in ASEAN Bali, Indonesia, 29 August 2008. Retrieved 14 November 2017 from http://asean.org/?static_post=bali-declaration-in-forging-partnership-to-advance-high-speed-connection-to-bridge-digital-divide-in-asean-bali-indonesia-29-august-2008
Asean.org. 2009. Vientiane Declaration on Promoting the Realisation of Broadband Across ASEAN Vientiane, 15 October 2009. Retrieved 14 November 2017 from http://www.asean.org/wp-content/uploads/images/archive/TELMIN/Vientiane-Declaration-TELMIN-9.pdf
Asean.org. 2011. ASEAN ICT Masterplan 2015. Jakarta: ASEAN Secretariat. Retrieved from http://www.scribd.com/doc/111870071/ASEAN-ICT-Masterplan-2015
Asean.org. 2016. ASEAN ICT Masterplan 2020. Jakarta: ASEAN Secretariat. Retrieved from http://www.asean.org/storage/images/2015/November/ICT/15b -- AIM 2020_Publication_Final.pdf
Asean.org. 2017. Overview - ASEAN. Retrieved 14 November 2017 from http://asean.org/asean/about-asean/overview/
Baltagi, B. 2013. Econometric Analysis of Panel Data. Fifth Edition. John Wiley & Sons. Retrieved from https://books.google.co.jp/books?id=oQdx_70Xmy0C
Bertschek, I; Briglauer, W; Hüschelrath, K; Kauf, B; Niebel, T. 2015. 'The Economic Impacts of Broadband Internet: A survey'. Review of Network Economics, 14(4), 201-227. https://doi.org/10.1515/rne-2016-0032
Bojnec, S; Fertő, I. 2012. 'Broadband availability and economic growth'. Industrial Management & Data Systems, 112(9), 1292–1306. https://doi.org/10.1108/02635571211278938
Bouras, C; Diles, G; Kokkinos, V. 2013. 'Impact of broadband public infrastructures and services on SEE countries’ economy'. 4th Global Information Infrastructure and Networking Symposium (GIIS 2013), Trento, Italy. https://doi:10.1109/GIIS.2013.6684353
Cawley, A; Preston, P. 2007. 'Broadband and digital “content” in the EU-25: Recent trends and challenges'. Telematics and Informatics, 24(4), 259–271. https://doi.org/10.1016/j.tele.2007.01.015
Choi, I. 2001. 'Unit root tests for panel data'. Journal of International Money and Finance, 20(2), 249–272. https://doi.org/10.1016/S0261-5606(00)00048-6
Crandall, R; Lehr, W; Litan, R. 2007. 'The Effects of Broadband Deployment on Output and Employment: A Cross-sectional Analysis of U.S. Data'. Issues in Economic Policy, 6, July 2007, 1–34.
Czernich, N; Falck, O; Kretschmer, T; Woessmann, L. 2011. 'Broadband Infrastructure and Economic Growth'. The Economic Journal, 121, 505–532. https://doi.org/10.1111/j.1468-0297.2011.02420.x.
Dumitrescu, E.-I; Hurlin, C. 2012. 'Testing for Granger non-causality in heterogeneous panels'. Economic Modelling, 29(4), 1450–1460. https://doi.org/10.1016/j.econmod.2012.02.014
Esonwune, C. 2011. Telecommunications Managed Services Model in sub-Saharan Africa – The Pros and Cons : The Case of Nigeria. Blekinge Institue of Technology. Retrieved from http://urn.kb.se/resolve?urn=urn:nbn:se:bth-5578%0A
Falch, M. 2007. 'Penetration of broadband services – The role of policies'. Telematics and Informatics, 24(4), 246–258. https://doi.org/10.1016/j.tele.2007.01.008
Falch, M; Henten, A. 2010. 'Public private partnerships as a tool for stimulating investments in broadband'. Telecommunications Policy, 34(9), 496–504. https://doi.org/10.1016/j.telpol.2010.07.010
Fanfalone, AG. 2015. Post-2015 Development Agenda- Mexico Perspectives: ICT Infrastructure. Retrieved from https://www.copenhagenconsensus.com/sites/default/files/mexico_ict_resouces.pdf
Granger, CWJ. 1969. 'Investigating Causal Relations by Econometric Models and Cross-spectral Methods'. Econometrica, 37(3), 424-438. https://doi.org/10.2307/1912791
Grosso, M. 2006. 'Determinants of Broadband Penetration in OECD Nations'. Communications, 1–31.
Grubesic, TH. 2004. 'The geodemographic correlates of broadband access and availability in the United States'. Telematics and Informatics, 21(4), 335–358. https://doi.org/10.1016/j.tele.2004.02.003
Hill, SR; Troshani, I; Burgan, B. 2014. 'Broadband adoption in regional and urban households'. Journal of Computer Information Systems, 54(3), 57-66.
Holt, L; Jamison, M. 2009. 'Broadband and contributions to economic growth: Lessons from the US experience'. Telecommunications Policy, 33(10–11), 575–581. https://doi.org/10.1016/j.telpol.2009.08.008
International Development Research Centre. 2008. Digital Review of Asia Pacific 2007/2008. Singapore: SAGE Publications. Retrieved from https://idl-bnc-idrc.dspacedirect.org/bitstream/handle/10625/34958/IDL-34958.pdf
Katz, RL; Vaterlaus, S; Zenhäusern, P; Suter, S. 2010. 'The impact of broadband on jobs and the German economy'. Intereconomics, 45(1). https://doi.org/10.1007/s10272-010-0322-y
Kim, Y; Orazem, PFPF. 2017. 'Broadband Internet and new firm location decisions in rural areas'. American Journal of Agricultural Economics, 99(1), 285–302. https://doi.org/10.1093/ajae/aaw082
Kolko, J. 2012. 'Broadband and local growth'. Journal of Urban Economics, 71(1), 100–113. https://doi.org/10.1016/j.jue.2011.07.004
Koutroumpis, P. 2009. 'The economic impact of broadband on growth: A simultaneous approach'. Telecommunications Policy, 33(9), 471–485. https://doi.org/10.1016/j.telpol.2009.07.004
LaRose, R; Bauer, JM; DeMaagd, K; Chew, HE; Ma, W; Jung, Y. 2014. 'Public broadband investment priorities in the United States: an analysis of the broadband technology opportunities program'. Government Information Quarterly, 31(1), 53–64. https://doi.org/10.1016/j.giq.2012.11.004
Lau, TY; Kim, SW; Atkin, D. 2005. 'An examination of factors contributing to South Korea’s global leadership in broadband adoption'. Telematics and Informatics, 22(4), 349–359. https://doi.org/10.1016/j.tele.2004.11.004
Lemstra, W; Voogt, B; Van Gorp, N. 2015. 'Measuring broadband in Europe: Development of a market model and performance index using structural equations modelling'. Telecommunications Policy, 39(3–4), 253–268. https://doi.org/10.1016/j.telpol.2015.01.006
Levin, A; Lin, C-F; Chu, C-SJ. 2002. 'Unit root tests in panel data: asymptotic and finite-sample properties'. Journal of Econometrics, 108(1), 1–24. https://doi.org/10.1016/S0304-4076(01)00098-7
Maddala, GS; Wu, S. 1999. 'A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test'. Oxford Bulletin of Economics and Statistics, 61(s1), 631–652. https://doi.org/10.1111/1468-0084.61.s1.13
Ng, TH; Lye, CT; Lim, Y. S. 2013. 'Broadband penetration and economic growth in ASEAN countries: a generalized method of moments approach'. Applied Economics Letters, 20(9), 857–862. https://doi.org/10.1080/13504851.2012.754538
OECD. 2002. The Development of Broadband Access in OECD Countries. OECD Publishing. https://doi.org/10.1787/9789264034754-en
OECD. 2008. Broadband Growth and Policies in OECD Countries. OECD Publishing. https://doi.org/10.1787/9789264046764-en
Rampersad, G; Troshani, I. 2013. 'Innovation in the digital economy: The impact of high-speed broadband on innovating SMEs'. In Proceedings of the 24th Australasian Conference on Information Systems, 4-6December 2013, Melbourne.
Ruddy, M; Ozdemir, E. 2013. An In-Depth Study of Broadband Infrastructure in the ASEAN Region. Bangkok: UN ESCAP.
Tookey, A; Whalley, J; Howick, S. 2006. 'Broadband diffusion in remote and rural Scotland'. Telecommunications Policy, 30(8–9), 481–495. https://doi.org/10.1016/j.telpol.2006.06.001
United Nations. 2015. 'Information Economy Report 2015: Unlocking the Potential of E-commerce for Developing Countries'. In United Nations Conference on Trade and Development, 19, 1–28. Geneva. https://doi.org/10.1093/ijlit/eaq011
Van Gaasbeck, KA. 2008. 'A rising tide: Measuring the economic effects of broadband use across California'. The Social Science Journal, 45(4), 691–699. https://doi.org/10.1016/j.soscij.2008.09.017
Wallsten, S. 2006. 'Broadband and Unbundling Regulations in OECD Countries'. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.906865