New Research Article on Broadband and Regional Economic Growth

In a new article published in the Journal of Productivity Analysis, Vista Analyse contributes to the understanding of the relationship between broadband deployment and regional economic growth. The authors examine the optimal timing of broadband investments.

The results indicate that Gross Regional Product could have been up to 10 percent higher if the regions had followed optimal investment paths. The analysis reveals differences across countries, with regions in Latvia exhibiting less efficient investment strategies than those in the neighboring countries. The findings also suggest that some regions may have overinvested in broadband infrastructure.

To conduct the analysis, the authors develop a production-theoretical framework to characterize the relationship between broadband investments and economic development. They also develop a two-stage estimation procedure that combines Convex Nonparametric Least Squares (CNLS) with linear programming to estimate optimal investment paths.

The framework is applied to a dataset covering the regional accounts of the 21 NUTS 3 regions in the Baltic countries. The project team previously established this dataset and published the accompanying documentation, as described here.

Partner Rasmus Bøgh Holmen represented Vista Analyse in the research and can be contacted for further information. The project was carried out in collaboration with BI Norwegian Business School, the Institute of Transport Economics, the University of Tartu, and the University of Turku.