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ICT use by households and firms in the EU: links and determinants from a multivariate perspective

Author

Listed:
  • Margarita Billon

    () (Universidad Autónoma de Madrid)

  • Fernando Lera-Lopez

    () (Universidad Pública de Navarra)

  • Rocio Marco

    () (Universidad Autónoma de Madrid)

Abstract

Abstract The progress toward a digital economy in Europe involves boosting ICT use in various environments, such as households and firms. Studies available at the regional level in Europe focus on ICT use by households. This paper sheds light on the digital divide by exploring the differences in ICT use across European regions, investigating simultaneously not only ICT use by households but also by firms. Using canonical correlation analysis, we first explore the existence of regional patterns of ICT use in Europe. Second, we test the influence of regional characteristics to explain ICT use by households and firms. Our results identify a first pattern defined by the regions that combine high levels of both ICT uses. This pattern is explained primarily by the quality of the regional government, knowledge-intensive services and economic development variables. A divide between southern and northern, and western and eastern regions is detected. We also identify a second pattern that captures ICT use by firms (not related to the first), predominantly determined by educational variables and some economic factors. This pattern does not exhibit the geographical digital divide found in the first. The findings show that there are synergies and regional factors explaining the use of ICT both at home and at work at the regional level in Europe that should be considered when designing public policy geared toward encouraging ICT diffusion.

Suggested Citation

  • Margarita Billon & Fernando Lera-Lopez & Rocio Marco, 2016. "ICT use by households and firms in the EU: links and determinants from a multivariate perspective," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 629-654, November.
  • Handle: RePEc:spr:weltar:v:152:y:2016:i:4:d:10.1007_s10290-016-0259-8
    DOI: 10.1007/s10290-016-0259-8
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    More about this item

    Keywords

    Internet; Firms; Households; Digital divide; Regions; ICT skills;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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