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

Authors: M. Ishaq Nadiri, Banani Nandi, Chandana Chakraborty

Addresses: Department of Economics, New York University, 269 Mercer Street, 7th Floor, New York, NY 10003, USA. ' AT&T Shannon Laboratory, Building 103, Room A013, 180 Park Avenue, Florham Park, NJ 07932, USA. ' Department of International Business, Montclair State University, Partridge Hall, Room 351, Upper Montclair, NJ 07043, USA

Abstract: 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.

Keywords: telecommunications infrastructure; marginal benefits; ICT intensity; network externality; telecommunications intensity; productivity growth; ICT capital; non-ICT capital; cost elasticity; scale elasticity; factor demand; USA; United States; return on investment; ROI.

DOI: 10.1504/IJMNE.2009.024784

International Journal of Management and Network Economics, 2009 Vol.1 No.2, pp.186 - 210

Published online: 30 Apr 2009 *

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