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Go for Gigabit? First Evidence on Economic Benefits of High‐speed Broadband Technologies in Europe

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  • Wolfgang Briglauer
  • Klaus Gugler
Abstract
The literature on the effects of investment in broadband infrastructure finds positive macroeconomic effects. However, it is severely constrained because it could hitherto only analyse investment or adoption up to basic broadband, but not up to the newer generations of hybrid fibre and end‐to‐end fibre‐based broadband. Utilizing a comprehensive panel dataset of EU27 member states for the period from 2003 to 2015, we estimate a small but significant effect of end‐to‐end fibre‐based broadband adoption over and above the effects of basic broadband on GDP; specifically, we find that a 1 per cent increase in adoption leads to an incremental increase of 0.002–0.005 per cent in GDP. The incremental effect of hybrid fibre broadband adoption over basic broadband is slightly lower (0.002–0.003%). Our cost‐benefit analysis implies that policy intervention – as foreseen by the European Commission – is only justified for coverage and adoption levels of around 50 per cent, whereas for a 100 per cent coverage level net losses are likely.

Suggested Citation

  • Wolfgang Briglauer & Klaus Gugler, 2019. "Go for Gigabit? First Evidence on Economic Benefits of High‐speed Broadband Technologies in Europe," Journal of Common Market Studies, Wiley Blackwell, vol. 57(5), pages 1071-1090, September.
    • Handle: RePEc:bla:jcmkts:v:57:y:2019:i:5:p:1071-1090
    DOI: 10.1111/jcms.12872
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    Cited by:

    1. Guiffard, Jean-Baptiste, 2024. "Valuing the virtual: The impact of fiber to the home on property prices in France," Telecommunications Policy, Elsevier, vol. 48(4).
    2. Whitacre, Brian & Biedny, Christina, 2022. "A preview of the broadband fabric: Opportunities and issues for researchers and policymakers," Telecommunications Policy, Elsevier, vol. 46(3).
    3. Briglauer, Wolfgang & Köppl-Turyna, Monika & Schwarzbauer, Wolfgang & Bittó, Virág, 2023. "Evaluating the effects of ICT core elements on CO2 emissions: Recent evidence from OECD countries," Telecommunications Policy, Elsevier, vol. 47(8).
    4. Oughton, Edward J. & Amaglobeli, David & Moszoro, Marian, 2023. "What would it cost to connect the unconnected? Estimating global universal broadband infrastructure investment," Telecommunications Policy, Elsevier, vol. 47(10).
    5. George Charalampopoulos & Dimitris Katsianis & Dimitris Varoutas, 2022. "Economic replicability tests: an “out-of-the-box” implementation," Netnomics, Springer, vol. 22(2), pages 115-138, October.
    6. Briglauer, Wolfgang & Dürr, Niklas S. & Gugler, Klaus, 2019. "A retrospective study on the regional benefits and spillover effects of high-speed broadband networks: Evidence from German counties," ZEW Discussion Papers 19-026, ZEW - Leibniz Centre for European Economic Research.
    7. Oughton, Edward J. & Comini, Niccolò & Foster, Vivien & Hall, Jim W., 2022. "Policy choices can help keep 4G and 5G universal broadband affordable," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    8. Steven Deller & Brian Whitacre & Tessa Conroy, 2022. "Rural broadband speeds and business startup rates," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(3), pages 999-1025, May.
    9. Leogrande, Angelo & Magaletti, Nicola & Cosoli, Gabriele & Massaro, Alessandro, 2022. "Fixed Broadband Take-Up in Europe," MPRA Paper 112246, University Library of Munich, Germany.
    10. Briglauer, Wolfgang & Dürr, Niklas & Gugler, Klaus, 2021. "A retrospective study on the regional benefits and spillover effects of high-speed broadband networks: Evidence from German counties," International Journal of Industrial Organization, Elsevier, vol. 74(C).
    11. Knips, Julian & Wernick, Christian & Tenbrock, Sebastian, 2022. "Analyse von Angeboten auf gigabitfähigen Infrastrukturen in Europa," WIK Discussion Papers 485, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    12. Briglauer, Wolfgang & Cambini, Carlo & Gugler, Klaus, 2023. "Economic benefits of high-speed broadband network coverage and service adoption: Evidence from OECD member states," Research Papers 23, EcoAustria – Institute for Economic Research.
    13. Briglauer, Wolfgang & Stocker, Volker, 2020. "Bedeutung digitaler Infrastrukturen und Dienste und Maßnahmen zur Förderung der Resilienz in Krisenzeiten," Policy Notes 42, EcoAustria – Institute for Economic Research.
    14. Briglauer, Wolfgang & Stocker, Volker & Whalley, Jason, 2020. "Public policy targets in EU broadband markets: The role of technological neutrality," Telecommunications Policy, Elsevier, vol. 44(5).
    15. Edquist, Harald, 2022. "The economic impact of mobile broadband speed," Telecommunications Policy, Elsevier, vol. 46(5).
    16. repec:zbw:itse23:277968 is not listed on IDEAS
    17. Vitor Miguel Ribeiro & Lei Bao, 2021. "Impact of next‐generation access networks on the innovation efficiency of Portuguese municipalities: A spatial econometrics approach," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(5), pages 1615-1637, October.
    18. Klein, Gordon J., 2022. "Fiber-broadband-internet and its regional impact—An empirical investigation," Telecommunications Policy, Elsevier, vol. 46(5).
    19. Wolfgang Briglauer & Michał Grajek, 2024. "Effectiveness and efficiency of state aid for new broadband networks: evidence from OECD member states," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 33(5), pages 672-700, July.
    20. Abrardi, Laura & Sabatino, Lorien, 2023. "Ultra-broadband investment and economic resilience: Evidence from the Covid-19 pandemic," Telecommunications Policy, Elsevier, vol. 47(2).
    21. Sahebali, M.W.W. & Sadowski, Bert M. & Nomaler, O. & Brennenraedts, R., 2021. "Rolling out of fibre optic networks in intermediate versus urban areas: An exploratory spatial analysis in the Netherlands," Telecommunications Policy, Elsevier, vol. 45(5).
    22. Briglauer, Wolfgang & Dürr, Niklas & Gugler, Klaus, 2019. "A Retrospective Study on the Regional Benefits and Spillover Effects of High-Speed Broadband Networks: Evidence from German Counties," 30th European Regional ITS Conference, Helsinki 2019 205171, International Telecommunications Society (ITS).
    23. Wolfgang Briglauer & Carlo Cambini & Klaus Gugler & Volker Stocker, 2023. "Net neutrality and high-speed broadband networks: evidence from OECD countries," European Journal of Law and Economics, Springer, vol. 55(3), pages 533-571, June.
    24. Ndubuisi, Gideon & Otioma, Chuks & Owusu, Solomon & Tetteh, Godsway Korku, 2022. "ICTs quality and technical efficiency: An empirical analysis," Telecommunications Policy, Elsevier, vol. 46(10).
    25. Biedny, Christina & Whitacre, Brian & Gallardo, Roberto, 2022. "Do ‘dig once’ and permitting policies improve fiber availability?," Telecommunications Policy, Elsevier, vol. 46(5).

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