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The Determinants of the Global Digital Divide: A Cross-Country Analysis of Computer and Internet Penetration

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Author Info
Menzie Chinn (University of Wisconsin, Madison)
Robert Fairlie (University of California Santa Cruz)

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Abstract

To identify the determinants of cross-country disparities in personal computer and Internet penetration, we examine a panel of 161 countries over the 1999-2001 period. Our candidate variables include economic variables (income per capita, years of schooling, illiteracy, trade openness), demographic variables (youth and aged dependency ratios, urbanization rate), infrastructure indicators (telephone density, electricity consumption), telecommunications pricing measures, and regulatory quality. With the exception of trade openness and the telecom pricing measures, these variables enter in as statistically significant in most specifications for computer use. A similar pattern holds true for Internet use, except that telephone density and aged dependency matter less. The global digital divide is mainly but by no means entirely accounted for by income differentials. For computers, telephone density and regulatory quality are of second and third importance, while for the Internet, this ordering is reversed. The regionspecific explanations for large disparities in computer and Internet penetration are generally very similar. Our results suggest that public investment in human capital, telecommunications infrastructure, and the regulatory infrastructure can mitigate the gap in PC and Internet use.

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Paper provided by Department of Economics, UC Santa Cruz in its series Santa Cruz Department of Economics, Working Paper Series with number 1020.

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Date of creation: 23 Feb 2004
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Handle: RePEc:cdl:ucscec:1020

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Related research
Keywords: computers; Internet; digital divide; infrastructure; pricing; regulation;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Quibria, M. G. & Ahmed, Shamsun N. & Tschang, Ted & Reyes-Macasaquit, Mari-Len, 2003. "Digital divide: determinants and policies with special reference to Asia," Journal of Asian Economics, Elsevier, vol. 13(6), pages 811-825, January. [Downloadable!] (restricted)
  2. Francesco Caselli & Wilbur John Coleman II, 2001. "Cross-Country Technology Diffusion: The Case of Computers," American Economic Review, American Economic Association, vol. 91(2), pages 328-335, May. [Downloadable!] (restricted)
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  3. Daiji Kawaguchi, 2006. "Are Computers At Home A Form Of Consumption Or An Investment? A Longitudinal Analysis For Japan," The Japanese Economic Review, Japanese Economic Association, vol. 57(1), pages 69-86. [Downloadable!] (restricted)
  4. Todd Sinai & Joel Waldfogel, 2003. "Geography and the Internet: Is the Internet a Substitute or a Complement for Cities?," NBER Working Papers 10028, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Gordon, Robert J, 2000. "Does the 'New Economy' Measure up to the Great Inventions of the Past?," CEPR Discussion Papers 2607, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  6. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Kiiski, Sampsa & Pohjola, Matti, 2002. "Cross-country diffusion of the Internet," Information Economics and Policy, Elsevier, vol. 14(2), pages 297-310, June. [Downloadable!] (restricted)
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  8. Hiroshi Ono & Madeline Zavodny, 2004. "Gender differences in information technology usage: a U.S.-Japan comparison," Working Paper 2004-2, Federal Reserve Bank of Atlanta. [Downloadable!]
  9. Estache, Antonio & Manacorda, Marco & Valletti, Tommaso M., 2002. "Telecommunication reforms, access regulation, and Internet adoption in Latin America," Policy Research Working Paper Series 2802, The World Bank. [Downloadable!]
  10. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December. [Downloadable!] (restricted)
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  11. Rodrik, Dani & Subramanian, Arvind & Trebbi, Francesco, 2002. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," CEPR Discussion Papers 3643, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  12. David H. Autor & Lawrence F. Katz & Alan B. Krueger, 1998. "Computing Inequality: Have Computers Changed The Labor Market?," The Quarterly Journal of Economics, MIT Press, vol. 113(4), pages 1169-1213, November. [Downloadable!] (restricted)
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  13. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March. [Downloadable!] (restricted)
  14. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," NBER Working Papers 3120, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Dasgupta, Susmita & Lall, Somik & Wheeler, David, 2001. "Policy reform, economic growth, and the digital divide - an econometric analysis," Policy Research Working Paper Series 2567, The World Bank. [Downloadable!]
  16. Oecd, 2001. "Understanding the Digital Divide," OECD Digital Economy Papers 49, OECD, Directorate for Science, Technology and Industry. [Downloadable!]
  17. Krueger, Alan B, 1993. "How Computers Have Changed the Wage Structure: Evidence from Microdata, 1984-1989," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 33-60, February. [Downloadable!] (restricted)
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  18. Brynjolfsson, Erik & Hitt, Lorin M., 2004. "Computing Productivity: Firm-Level Evidence," Working papers 4210-01, Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
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  19. Dale W. Jorgenson, 2001. "Information Technology and the U. S. Economy," Harvard Institute of Economic Research Working Papers 1911, Harvard - Institute of Economic Research. [Downloadable!]
  20. Oyelaran-Oyeyinka, Banji & Lal, Kaushalesh, 2003. "The Internet Diffusion in Sub-Saharan Africa: A cross-country Analysis," Discussion Papers 5, United Nations University, Institute for New Technologies. [Downloadable!]
  21. Temple, Jonathan, 2001. "Growth Effects of Education and Social Capital in the OECD Countries," CEPR Discussion Papers 2875, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Cuberes, David, 2008. "The Diffusion of Internet: A Cross-Country Analysis," MPRA Paper 8433, University Library of Munich, Germany. [Downloadable!]
  2. Thomas Barnebeck Andersen & Jeanet Bentzen & Carl-Johan Dalgaard & Pablo Selaya, 2008. "On the Impact of Digital Technologies on Corruption: Evidence from U.S. States and Across Countries," Discussion Papers 08-11, University of Copenhagen. Department of Economics. [Downloadable!]
  3. Luis Hernando Gutierrez & Luis Fernando Gamboa, 2008. "An approximation to the digital divide among Low Income People in Colombia, Mexico and Perú: two composite indexes," DOCUMENTOS DE TRABAJO 004710, UNIVERSIDAD DEL ROSARIO - FACULTAD DE ECONOMÍA. [Downloadable!]
  4. Ono, Hiroshi, 2005. "Digital Inequality In East Asia : Evidence From Japan, South Korea And Singapore," EIJS Working Paper Series 219, The European Institute of Japanese Studies. [Downloadable!]
    Other versions:
  5. Charles Amo Yartey, 2006. "Financial Development, the Structure of Capital Markets, and the Global Digital Divide," IMF Working Papers 06/258, International Monetary Fund. [Downloadable!]
  6. Kuku, Yemisi & Orazem, Peter F. & Singh, Rajesh, 2004. "Computer Adoption and Returns in Transition," IZA Discussion Papers 1360, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Andres, Luis & Cuberes, David & Diouf, Mame Astou & Serebrisky, Tomas, 2007. "Diffusion of the internet : a cross-country analysis," Policy Research Working Paper Series 4420, The World Bank. [Downloadable!]
  8. Arne Wiig, 2004. "Risk and disintermediation in tourism," CMI Working Papers WP 2004: 6, CMI (Chr. Michelsen Institute), Bergen, Norway. [Downloadable!]
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