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ICT Use in the Developing World: An Analysis of Differences in Computer and Internet Penetration

  • Menzie D. Chinn
  • Robert W. Fairlie

Using panel data for 161 countries, we explore the determinants of cross-country disparities in personal computer and Internet penetration. We find evidence indicating that income, human capital, the youth dependency ratio, telephone density, legal quality, and banking sector development are associated with technology penetration rates. Estimates from Blinder-Oaxaca decompositions comparing rates in the developed-country total to developing countries (Total, Brazil, China, Indonesia, India, Mexico, and Nigeria) reveal that the main factors responsible for low rates of technology penetration rates in developing countries are disparities in income, telephone density, legal quality, and human capital. In terms of dynamics, our results indicate fairly rapid reversion to long-run equilibrium for Internet use, and somewhat slower reversion for computer use. Copyright � 2010 Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 18 (2010)
Issue (Month): 1 (02)
Pages: 153-167

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Handle: RePEc:bla:reviec:v:18:y:2010:i:1:p:153-167
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  1. Menzie D. Chinn & Hiro Ito, 2005. "What Matters for Financial Development? Capital Controls, Institutions, and Interactions," NBER Working Papers 11370, National Bureau of Economic Research, Inc.
  2. W. Edward STEINMUELLER, 2001. "ICTs and the possibilities for leapfrogging by developing countries," International Labour Review, International Labour Organization, vol. 140(2), pages 193-210, 06.
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  4. 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.
  5. Menzie D. Chinn & Robert W. Fairlie, 2004. "The Determinants of the Global Digital Divide A Cross-Country Analysis of Computer and Internet Penetration," Working Papers 881, Economic Growth Center, Yale University.
  6. 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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  19. Diego Comin & Bart Hobijn & Emilie Rovito, 2006. "Five Facts You Need to Know About Technology Diffusion," NBER Working Papers 11928, National Bureau of Economic Research, Inc.
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