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Financial development, the structure of capital markets, and the global digital divide

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  • Yartey, Charles Amo
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    Abstract

    This paper examines the extent to which financial development and financial structure may explain cross-country diffusion of information communication technology (ICT). Using panel data for 76 emerging and advanced countries for the period 1990-2003, it finds that credit and stock market development tends to foster ICT diffusion, but financial structure does not appear to have any significant relationship with it. The conclusions, which are consistent with what theory might predict, highlight the role of financial development in the market for knowledge-based products. The finding that financial development is an important determinant of ICT diffusion implies that countries with underdeveloped financial markets may sink even further to the information-poor and noncommunicating side of the global digital divide.

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    File URL: http://www.sciencedirect.com/science/article/B6V8J-4S03R9Y-1/1/78cd82ac43b22d81ad7ffa9e633d4f76
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    Bibliographic Info

    Article provided by Elsevier in its journal Information Economics and Policy.

    Volume (Year): 20 (2008)
    Issue (Month): 2 (June)
    Pages: 208-227

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    Handle: RePEc:eee:iepoli:v:20:y:2008:i:2:p:208-227

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    Web page: http://www.elsevier.com/locate/inca/505549

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    1. Black, Bernard S. & Gilson, Ronald J., 1998. "Venture capital and the structure of capital markets: banks versus stock markets," Journal of Financial Economics, Elsevier, vol. 47(3), pages 243-277, March.
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    12. Franklin Allen & Douglas Gale, 1999. "Diversity of Opinion and Financing of New Technologies," Center for Financial Institutions Working Papers 98-30, Wharton School Center for Financial Institutions, University of Pennsylvania.
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    Cited by:
    1. Srinuan, Chalita & Bohlin, Erik, 2011. "Understanding the digital divide: A literature survey and ways forward," 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues 52191, International Telecommunications Society (ITS).

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