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The dynamic behavior of high-efficiency light-emitting diodes (LEDs) is investigated theoretically and experimentally. A detailed theoretical description of the switch-on and switch-off transients of LEDs is derived. In the limit of small-signal modulation, the well-established exponential behavior is obtained. However, in the case of high injection, which is easily reached for thin active layer LEDs, the small-signal time constant is found to be up to a factor of two faster than the radiative recombination lifetime. Using such quantum-well LEDs, we have demonstrated optical data transfer with wide open eye diagrams at bit rates up to 2 Gbit/s. In addition, we have combined the use of thin active layers with the concept of surface-textured thin-film LEDs, which allow a significant improvement in the light extraction efficiency. With LEDs operating at 0.5 Gbit/s and 1 Gbit/s, we have achieved external quantum efficiencies of 36% and 29%, respectively.