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The Diffusion of Internet: A Cross-Country Analysis

  • Cuberes, David
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    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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    File URL: http://mpra.ub.uni-muenchen.de/8433/1/MPRA_paper_8433.pdf
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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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    1. 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.
    2. Chinn, Menzie David & Fairlie, Robert W, 2004. "The Determinants of the Global Digital Divide: A cross-country analysis of computer and internet penetration," Center for Global, International and Regional Studies, Working Paper Series qt6hz053p3, Center for Global, International and Regional Studies, UC Santa Cruz.
    3. Wolfgang Keller, 2001. "International Technology Diffusion," NBER Working Papers 8573, National Bureau of Economic Research, Inc.
    4. 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.
    5. 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.
    6. Goolsbee, Austan & Klenow, Peter J, 2002. "Evidence on Learning and Network Externalities in the Diffusion of Home Computers," Journal of Law and Economics, University of Chicago Press, vol. 45(2), pages 317-43, October.
    7. 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.
    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.
    9. Diego Comin & Bart Hobijn, 2003. "Cross-country technology adoption: making the theories face the facts," Staff Reports 169, Federal Reserve Bank of New York.
    10. Francesco Caselli & Wilbur John Coleman, 2001. "Cross-Country Technology Diffusion: The Case of Computers," American Economic Review, American Economic Association, vol. 91(2), pages 328-335, May.
    11. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    12. Oecd, 2001. "Understanding the Digital Divide," OECD Digital Economy Papers 49, OECD Publishing.
    13. 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.
    14. 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.
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