Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238267 
Year of Publication: 
2021
Series/Report no.: 
ESMT Working Paper No. 21-01
Publisher: 
European School of Management and Technology (ESMT), Berlin
Abstract: 
The deployment of new broadband networks (NBNs) based on fiber-optic transmission technologies promises high gains in terms of productivity and economic growth, and has attracted subsidies worth billions from governments around the world in the form of various state aid programs. Yet, the effectiveness and the efficiency of such programs remains largely unstudied. We employ panel data from 32 OECD countries during 2002-2019 to provide robust empirical evidence of both. We find that state aid significantly increases NBNs by facilitating the deployment of new connections to 22% of households in the short term and 39.2% in the long term. By comparing the actual amounts of state aid support to the estimated impact on GDP growth, we also find it to be highly cost efficient, as the programs break even after three years on average.
Subjects: 
Fiber optic technology
state aid
ex-post evaluation
efficiency
OECD countries
JEL: 
C51
C54
H25
L52
O38
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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