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The Diffusion of Internet: A Cross-Country Analysis

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Author Info
Cuberes, David
Abstract

This paper analyzes the process of Internet diffusion across the world using a panel of 199 countries during the time interval 1990-2004. We group countries in two categories, low and high income countries, and show that the Internet diffusion process is well characterized by an S-shape curve for both groups. Low income countries display a steeper diffusion curve and equivalent to a right shift of the high income countries diffusion curve. The estimated diffusion curves provide evidence of a “catching up” process, although a very slow one. We next explore the determinants of Internet diffusion at the country level and across the same income groups. Our most novel finding is that network effects seem to be crucial—the number of Internet users in a country at a given year is positively associated with the number of users in the previous year. We also find that the degree of competition in the provision of Internet contributes positively to its diffusion and we also identify significant positive language externalities.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8433.

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Date of creation: 15 Mar 2008
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Handle: RePEc:pra:mprapa:8433

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Related research
Keywords: Technological diffusion Internet S-shape curve Network externalities Digital divide

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Find related papers by JEL classification:
O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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  1. Goolsbee, Austan & Klenow, Peter J, 2002. "Evidence on Learning and Network Externalities in the Diffusion of Home Computers," Journal of Law & Economics, University of Chicago Press, vol. 45(2), pages 317-43, October.
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  2. Caselli, Francesco & Coleman II, Wilbur John, 2001. "Cross-Country Technology Diffusion: The Case of Computers," CEPR Discussion Papers 2744, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Wolfgang Keller, 2001. "International Technology Diffusion," NBER Working Papers 8573, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Sanchez-Robles, Blanca, 1998. "Infrastructure Investment and Growth: Some Empirical Evidence," Contemporary Economic Policy, Oxford University Press, vol. 16(1), pages 98-108, January.
  5. Wallsten, Scott, 2005. "Regulation and Internet Use in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 53(2), pages 501-23, January.
  6. Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, vol. 91(4), pages 909-923, September. [Downloadable!] (restricted)
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  7. 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!]
  8. Chong, Alberto & Micco, Alejandro, 2003. "The Internet and the ability to innovate in Latin America," Emerging Markets Review, Elsevier, vol. 4(1), pages 53-72, March. [Downloadable!] (restricted)
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  9. Menzie D. Chinn & Robert W. Fairlie, 2007. "The determinants of the global digital divide: a cross-country analysis of computer and internet penetration," Oxford Economic Papers, Oxford University Press, vol. 59(1), pages 16-44, January. [Downloadable!] (restricted)
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  10. Gort, Michael & Klepper, Steven, 1982. "Time Paths in the Diffusion of Product Innovations," Economic Journal, Royal Economic Society, vol. 92(367), pages 630-53, September. [Downloadable!] (restricted)
  11. Diego Comin & Bart Hobijn, 2003. "Cross-country technology adoption: making the theories face the facts," Staff Reports 169, Federal Reserve Bank of New York. [Downloadable!]
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