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The Diffusion of Internet: A Cross-Country Analysis

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  • Cuberes, David
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    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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    Bibliographic Info

    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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    1. Chinn, Menzie David & Fairlie, Robert W, 2004. "The Determinants of the Global Digital Divide: A Cross-Country Analysis of Computer and Internet Penetration," Santa Cruz Department of Economics, Working Paper Series qt2r80c4t3, Department of Economics, UC Santa Cruz.
    2. Wolfgang Keller, 2004. "International Technology Diffusion," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 752-782, September.
    3. Austan Goolsbee & Peter J. Klenow, 1999. "Evidence on Learning and Network Externalities in the Diffusion of Home Computers," NBER Working Papers 7329, National Bureau of Economic Research, Inc.
    4. Comin, D. & Hobijn, B., 2003. "Cross-Country Technology Adoption: Making the Theories Face the Facts," Working Papers 03-04, C.V. Starr Center for Applied Economics, New York University.
    5. Röller, Lars-Hendrik & Waverman, Leonard, 2000. "Telecommunications Infrastructure And Economic Development: A Simultaneous Approach," CEPR Discussion Papers 2399, C.E.P.R. Discussion Papers.
    6. Francesco Caselli & Wilbur John Coleman II, 2001. "Cross-Country Technology Diffusion: The Case of Computers," NBER Working Papers 8130, National Bureau of Economic Research, Inc.
    7. Antonio Estache & Marco Manacorda & Tommaso M. Valletti, 2002. "Telecommunications Reform, Access Regulation, and Internet Adoption in Latin America," Journal of LACEA Economia, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
    8. Alberto Chong & Alejandro Micco, 2002. "The Internet and the Ability to Innovate in Latin America," Research Department Publications 4291, Inter-American Development Bank, Research Department.
    9. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    10. Oecd, 2001. "Understanding the Digital Divide," OECD Digital Economy Papers 49, OECD Publishing.
    11. 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.
    12. 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.
    13. Blanca Sanchez-Robles, 1998. "Infrastructure Investment And Growth: Some Empirical Evidence," Contemporary Economic Policy, Western Economic Association International, vol. 16(1), pages 98-108, 01.
    14. 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.
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    Cited by:
    1. PENARD Thierry & POUSSING Nicolas & ZOMO YEBE Gabriel & NSI ELLA Philémon, 2012. "Usage d'Internet et du téléphone mobile en Afrique : une comparaison des déterminants d'adoption sur données gabonaises," CEPS/INSTEAD Working Paper Series 2012-15, CEPS/INSTEAD.
    2. PENARD Thierry & POUSSING Nicolas & MUKOKO Blaise & TAMOKWE Georges Bertrand, 2013. "Internet adoption and usage patterns in Africa: Evidence from Cameroon," CEPS/INSTEAD Working Paper Series 2013-22, CEPS/INSTEAD.

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