High Speed Internet Access and Innovation: The Effects of Broadband on Patents within Korea and the U.S.
25 Pages Posted: 1 Apr 2016 Last revised: 24 Sep 2016
Date Written: August 14, 2016
This study explores the influence of broadband speed on patents in South Korea and the U.S. A fixed effect regression model with quarterly balanced panel data from 2007–2014 was used in the analysis. An interaction term was included to measure the effect of interaction between the speed and penetration of broadband on patents. Given this objective, this study investigates how the innovative effect of broadband changes with the intensities of high- and low-technology. The International Patent Classification index was adopted in the analysis. Macro indicators were retrieved from the Organization for Economic Co-operation and Development and the World Bank database. Data on broadband speed were collected from Akamai Technologies, Inc., a company that provides content delivery network services for media and software and offers regular reports on access and speed of the Internet.
The result of this study shows the existing effect of broadband on patent applications. The estimated coefficients of broadband speed and the interaction between speed and penetration are statistically significant. The mean speed of broadband in Korea and the U.S. that contributed 0.25% to the growth in patent applications, compare to the previous quarter, is 10.4 Mbps. The coefficient of broadband interaction focuses on the trade-off between increased speed and increased penetration as indicated in the -0.0069% impact on patent applications. This study also found the effect of technology intensity. The possibility of obtaining high patent applications in high-technology increased by 12%. Such an increase offered an assumption on the synergic impact of interaction between broadband and high-technology.
Keywords: high-speed internet, high-speed broadband access, innovation, patent
JEL Classification: A13, C43, C81, O31, O34
Suggested Citation: Suggested Citation