Association between broadband density and economic indicators in the Brazilian Legal Amazon

This paper seeks to investigate the influences of increased broadband density on the economic indicators of the municipalities that make up the Brazilian Legal Amazon. Data from 2007 to 2021 from the 5506 Brazilian municipalities are considered, along with an econometric panel data model that allows for comparison of the municipalities in the region with others. Empirical evidence shows that the municipalities in the region experienced substantial growth in broadband density, mobile phone use, and network availability. The results provide strong evidence of an association between the expansion of broadband availability and GDP growth, job creation, and broader economic activity. The agriculture, industry, and public administration sectors show positive and significant elasticities, confirming that improved connectivity can influence productivity and strengthen government operations. In contrast, the trade and services sectors do not show statistically significant associations, indicating a need for complementary policies to foster digital adoption in these sectors. Despite the progress achieved, results also show a persistent digital gap between Legal Amazon and the rest of Brazil. Given these findings, the need to prioritize continuous investments in digital infrastructure to accelerate connectivity and support sustainable economic development in the region is evident.