Telecommunications infrastructure, telecommunications intensity and productivity growth in US industries: a disaggregated approach

This paper examines the productivity impact of telecommunications infrastructure and telecommunications intensity for 41 US industries over the period 1977 through 1999. A translog cost function that includes both telecommunications infrastructure and telecommunications equipment in its input vector has been used to model production process at the industry level. The results of estimation suggest positive, but variant, marginal benefits of telecommunications infrastructure across the industry panel. Relatively higher benefits are observed for service sector industries that use telecommunications equipment intensely in their production process. Overall, the results suggest a higher social rate of return on telecommunications infrastructure investment for the aggregate US economy.