Telecommunications services and economic growth: Evidence from India

This paper estimates the growth contributions of telecom services by public and private sectors and distinguishes it from the information technology services. Socio-economic determinants of demand for telecom services are estimated for fixed and mobile phones in the framework of a Logit model and using data from a small-household sample survey in India. Estimation results show a significant negative impact of price and a positive impact of income variables; distinguish the importance of social caste, education level, nature of occupation, age of household head and family size between fixed and mobiles phones and offer evidence for substitutability of mobile phones for fixed phones. These results add to the empirical knowledge of socio-economic determinants of telecom demand and have implications for selective design of policies towards promotion of higher demand and attainment of higher economic growth by fixed and mobile services in India and other developing countries.     

Determinants of mobile broadband use in developing economies: Evidence from Sub-Saharan Africa

Broadband is seen as a vector of economic growth and social development. In the developing world, mobile technologies are widely adopted and mobile broadband is progressively rolled-out with high expectations on its impact on the countries’ development. We highlight what the determinants of mobile broadband use are in four Sub-Saharan countries. Using micro-level data coming from household surveys over 5 years, from 2013 to 2017, we show that SIM card ownership and being part of an online social community has a strong positive impact on mobile broadband use. We also highlight a positive correlation between digital inclusion and financial inclusion as mobile money users and bank account users are found to be more inclined to use mobile broadband. However, beyond apparent similarities, mobile broadband is used in different ways according to countries specificities. For instance, among the non-mobile owners in Nigeria, the unemployed are the most likely to use mobile broadband, most probably for job search practices, while it is rather used by students for information gathering in other countries. Finally we show that those excluded from mobile broadband use are the eldest, those with the lowest level of education, and women.     

The broadband digital divide and the economic benefits of mobile broadband for rural areas

Broadband is becoming increasingly important to national economies and the personal lives of users. However, broadband availability and adoption are not diffusing in rural and urban areas at the same rates. This article updates the rural broadband digital divide, with special attention paid to mobility. Empirical estimations of broadband provision and usage in the US show that rural areas have fewer high-speed fixed and mobile providers but more slower-speed fixed providers than urban areas. While rural availability of mobile broadband is lower than in urban areas, it still helps fill in gaps in fixed broadband coverage in rural areas. The rural gap in fixed broadband usage remains, but the mobile broadband usage gap disappears after controlling for household demographics. The raw broadband usage gaps between rural and urban households are proportionally greater for low-income households. The potential for mobile broadband to benefit rural areas through economic development is also examined.     

Welfare impacts of improved chickpea adoption: A pathway for rural development in Ethiopia?

We analyse the impact of improved chickpea adoption on welfare in Ethiopia using three rounds of panel data. First, we estimate the determinants of improved chickpea adoption using a double hurdle model. We apply a control function approach with correlated random effects to control for possible endogeneity resulting from access to improved seed and technology transfer activities. To instrument for these variables we develop novel distance weighted measures of a household’s neighbours’ access to improved seed and technology transfer activities. Second, we estimate the impact of area under improved chickpea cultivation on household income and poverty. We apply a fixed effects instrumental variables approach where we use the predicted area under cultivation from the double hurdle model as an instrument for observed area under cultivation. We find that improved chickpea adoption significantly increases household income while also reducing household poverty. Finally, we disaggregate results by landholding to explore whether the impact of adoption has heterogeneous effects. Adoption favoured all but the largest landholders, for who the new technology did not have a significant impact on income. Overall, increasing access to improved chickpea appears a promising pathway for rural development in Ethiopia’s chickpea growing regions.     

Is better access to mobile networks associated with increased mobile money adoption? Evidence from the micro-data of six developing countries

In several developing countries in Sub-Saharan Africa, accessibility to digital financial services is increasing because of the development of mobile money services. People previously excluded from the financial system have started to have access to financial services such as receiving and sending remittances, saving, and borrowing. This study examines the effect of network accessibility on the use of mobile money in six developing countries (Bangladesh, Kenya, Nigeria, Pakistan, Tanzania, and Uganda) using GPS information on each household and mobile phone network coverage maps. We find that among these six countries, network accessibility is associated with the use of mobile money in a robust way only in Pakistan and Tanzania. In those two countries, when a household location becomes 10 km closer to the center of the area with multiple mobile networks, the probability of using mobile money increases by 10 percent. In the other countries, we did not find a robust relationship between the use of mobile money and network accessibility. This suggests that increasing network accessibility may not be an efficient method for increasing mobile money adoption in certain countries. The fact that mobile money use rates differ between Tanzania and Pakistan also suggests that the effect of mobile networks is unrelated to the overall level of mobile money adoption.     

Analysis of fixed broadband access and use in Thailand: Drivers and barriers

The aim of this paper is to analyze the demand for fixed broadband in Thailand. Data were obtained from a national survey in 2010 by the National Broadcasting and Telecommunications Commission (NBTC) of Thailand. The bivariate probit model was employed to examine empirically whether accessibility to fixed telephony infrastructure, socio-economic variables and the area of residence have a systematic link to fixed broadband access in the first stage, and then, specific usage, provided access exists, is estimated. Results of this study show that the variables, together with their potential impact, are as follows: fixed infrastructure, income, gender, level of education, age of consumer and residential area. The impact of these factors varies from service to service (i.e. video download, social network, searching and e-mail). The implications for the NBTC are to encourage competition through the infrastructure and to permit more competition in infrastructure development. This could stimulate the growth of fixed broadband access and use. At the same time, the government could also implement policies to encourage more access and usage, for example income subsidization and training program.     

Identifying the determinants of broadband adoption by diffusion stage in OECD countries

Governments worldwide actively promote broadband development, owing to its positive impact on economic growth. Although many studies have identified the determinants of broadband adoption, this study re-examines the determinants by applying Arellano–Bond GMM dynamic panel data estimation with more complete panel data for OECD countries. The estimation can not only closely capture the dynamics of broadband diffusion but also solve an endogeneity problem existing in the estimations of previous studies. The estimation results indicate that content is also a significant factor, in addition to previous broadband penetration and platform competition, as commonly identified in previous studies. This study further examines and compares determinants in different stages segmented by adopter categories proposed by Rogers. The results reveal different determinants in different stages. The key determinants are income, education, and content in the innovator and early adopter stage; platform competition and previous broadband penetration in the early majority stage; and broadband price in the late majority and laggard stage. Governments should thus devise and implement appropriate strategies for the major potential adopters in each stage instead of adopting a one-size-fits-all strategy. The results of this study provide a valuable reference for countries in early stages of broadband development or for those planning or reviewing their strategies.     

The economic impact of mobile broadband speed

Based on panel data of 116 countries in 2014–2019, this paper investigates the association between mobile broadband speed and labor productivity. It finds no robust contemporaneous relationship for the total sample, but there is a significant and robust association when a one-year lag of mobile broadband speed is introduced. The interpretation of the results is that a 10 percent increase in mobile broadband speed in period t-1 is associated with 0.2 percent increase in labor productivity, ceteris paribus. The results are only robust for non-OECD and low-income countries, respectively.     

Friends or Foes? Mobile money interaction with formal and informal finance

Access to formal financial services is a key determinant of financial inclusion and yet, informal mechanisms still dominate the financial system in developing countries. In this context, the purpose of our article is to investigate how the growing effort to harness mobile money designed for unbanked individuals may help to overcome barriers to access formal financial services. Using a unique dataset obtained from an individual-level survey conducted in Burkina Faso, we explore the interplay between mobile money innovation and pre-existing formal and informal financial instruments. Our main findings show that, overall there are no differences in the inclination of mobile money users and non-users to make deposits in formal or informal deposit instruments. However, a closer investigation reveals suggestive evidence that it may increase the probability of participants in informal mechanisms to make deposits in formal financial instruments, especially using a bank account. Moreover, considering disadvantaged groups, we find for women, irregular income and less educated individuals that mobile money may increase their probability to make deposits in a bank and/or credit union accounts. Our results are robust to using instrumental variables and propensity score matching techniques that mitigate the endogeneity problem. They also pass a number of robustness checks as well as considering an alternative dataset. Given the low access to formal financial services in developing countries, our findings taken together indicate how the increasing adoption of mobile money may act as a stepping-stone towards financial inclusion. (JEL Classification C83, D14, G21)     

Path dependencies versus efficiencies in regulation: Evidence from “old” and “new” broadband markets in the EU

This paper examines the determinants of sector-specific regulation imposed on broadband markets related both to efficiency objectives of regulators and to those of narrowly defined interest groups. We test hypotheses derived from the normative and positive theoretical literature employing recent panel data on 27 European Union member states taking into account endogeneity of the underlying regulation and market structure variables. Our empirical specification employs three different estimators based on instrumental variables in order to identify causal effects. We find evidence supporting both regulators pursuing normative objectives and inefficiencies related to regulatory path dependence, bureaucracy goals and an inadequate consideration of competition from mobile broadband networks. Our results call for adjustments in the institutional design of the decision-making process under the current European Union regulatory framework.     

Income distribution and the diffusion of networks: An empirical study of Brazilian telecommunications

Telecommunications is often considered to be an important contributor to economic growth, and most countries have therefore adopted several initiatives to improve coverage of fixed as well as mobile telephones. This paper focuses on the role of income distribution on the diffusion of fixed telecommunications in Brazil. The focus is on how the distribution of income may affect affordability and thereby the market size. The result is that an uneven income distribution may result in higher coverage for the poorest municipalities in the study since the uneven distribution allows for at least some consumers to reach the critical level of income. For municipalities above a certain average income level, the effect is reversed and coverage will be adversely affected by high inequality. The findings are robust to different measures of inequality.     

Unbundling and infrastructure competition for broadband adoption: Implications for NGA regulation

The common idea of open access policy is that it refers to the sharing of particular elements, such as wholesale access networks, backhaul, under-sea cable and internet exchange points in fixed and mobile networks. In broadband networks, the use of open access policy usually refers to the infrastructure parts, which are considered a bottleneck. Many regulators have generally focused open access policy on fixed broadband networks, especially digital subscriber line (DSL) technology, in the last decade. Local loop unbundling (LLU) regulation is one of the main strategies for the regulator to open access to an incumbent’s bottleneck network in order to soften its monopoly power and encourage competition in the DSL broadband market. The OECD countries have different strategies regarding unbundling local loop and infrastructure competition, as the characteristics and infrastructure networks of countries vary. There are currently more choices of next generation network (NGN) technologies to develop. While local loop unbundling may not be applied fully to NGN development (the cost is not sunk, more technologies are available to implement, incentive of investment by operator), it can indicate benefits and drawbacks of open access policy in the past decade that can be adapted to NGN.The empirical results of this study show that during 2002–2008, LLU regulation was one of the strategies used to increase broadband adoption in countries that had difficulty encouraging infrastructure competition. Unbundling regulation can therefore be implemented carefully and differently in each country that has inefficiency that is harmful to consumers in its market from a monopoly incumbent. Infrastructure competition, on the other hand, is introduced as another strategy to increase broadband adoption. The empirical results of this study indicate that infrastructure competition can be used as a strategy when there are already enough infrastructures in the area or country. These results support the idea of using open access and infrastructure competition policy depending on the existing competition of broadband infrastructure in each country.     

Broadband expectations and the convergence of ranks

Broadband Internet service to widely held to be a significant contributor to economic development and global competitiveness, and comparison of adoption rates across countries are common. This paper presents evidence that the relative broadband Internet adoption ranks across the Organisation for Economic Co-Operation and Development (“OECD”) countries are converging to the wireline telephone adoption ranks in the mid 1990s. This was a time when wireline telephone service had reached maturity, but before consumers began to abandon traditional telephone services for mobile services and Internet telephone technologies. As such, in the absence of better data on household adoption, wireline telephone rank is a useful proxy for a country's ultimate fixed-line broadband penetration rank. Having such an educated guess available regarding broadband rank should reduce the amount of anxiety over rankings, since similar rankings across the two services implies suitable broadband performance. Large departures, alternately, may be a cause for concern or delight. Like prior analyses, the findings suggest that the adoption of communications services is largely an economic and demographic issue.     

Broadband׳s contribution to economic growth in rural areas: Moving towards a causal relationship

This paper uses recent data on both broadband availability and adoption to empirically gauge the contribution of broadband to the economic growth of rural areas of the United States over the past decade. Availability data from the National Broadband Map aggregated to county level is used in conjunction with county-level adoption data from Federal Communication Commission. Economic variables of interest include median household income, number of firms with paid employees, total employed, percentage in poverty, and the percentage of employees classified as either creative class or non-farm proprietors. A propensity score matching technique (between a “treated” group associated with various broadband thresholds and a control group) is used to make preliminary causal statements regarding broadband and economic health. Growth rates between 2001 and 2010 for different economic measures are tested for statistical differences between the treated and non-treated groups, restricting the analysis to non-metropolitan counties. Results suggest that high levels of broadband adoption in rural areas positively (and potentially causally) impacted income growth between 2001 and 2010, and negatively influenced unemployment growth. Similarly, low levels of broadband adoption in rural areas lead to declines in the number of firms and total employment numbers in the county. Broadband availability measures (as opposed to adoption) demonstrate only limited impacts, suggesting that future broadband policies should be more demand-oriented.     

Empirical analysis of factors promoting the Japanese 3G mobile phone

This paper aims to specify factors promoting the 3G mobile in Japan. The factors are represented by value-added services such as FeliCa, which enables e-payment, data roaming services, and full music downloads. Panel data from the three main carriers, which occupy over 90% of the Japanese mobile market, is utilized. In order to control network effects as well as the endogeneity of variables, the Arellano–Bond dynamic panel estimation is adopted. As a result, the launch of the iPhone 3G, FeliCa, data roaming, full music downloads, and the flat rate are revealed to have affected the diffusion of the 3G mobile in Japan. The results, reflecting the importance of value-added services, can be applied not only to the next generation mobile development, but also to the promotion of 3G networks in other countries.     

Closing the rural broadband gap: Promoting adoption of the Internet in rural America

Even as geographic disparities in high speed Internet access narrow, an urban–rural broadband gap persists, pointing to the importance of individual differences in motivations to adopt broadband as the key to closing the gap. Diffusion of innovation is reconceptualized through contemporary perspectives of the digital divide and social cognitive theory and tested on a survey sample drawn from four rural communities. Path analysis was used to examine the factors that cause broadband Internet service adoption in rural communities. Prior experience with the Internet, the expected outcomes of broadband usage, direct personal experience with broadband, and self-efficacy had direct effects on broadband intentions. Age and income, but not education or ethnicity, also had direct impacts. Efforts that promote the personal benefits of broadband and advanced ICT literacy skills among Internet users are recommended.