Paper LinkMany telecommunications policy efforts are aimed at increasing consumer subscribership and usage. Because of the positive externalities likely to emanate from better communications flows, these goals are likely to generate social benefits beyond the private benefits to the consumer. We provide evidence on one possible social benefit in the Chinese experience -- increased economic growth stemming from greater usage of the mobile telecommunications network.
We contribute to the role of telecommunications service on economic growth in three ways. We separately examine fixed-line and mobile telephone subscription levels. We compare results across periods and regions that differ by the level of development. In addition, we develop a method designed to address endogeneity of telecommunications with respect to growth. We find that mobile services contribute much more to growth but that the effect diminishes as the provincial economy develops more.
