How to Overcome the Digital Divide? The Determinants of Internet Diffusion
We document the existence and the persistence of the digital divide and investigate the determinants of the Internet diffusion in both developing and developed countries. Our study innovates on the following: i) we use a data set that covers more countries and years than the earlier studies ii) We use the GMM estimator which requires milder assumptions to be consistent than the traditionally used panel data estimators in technology diffusion studies. We find that i) the digital divide is likely to persist over time, ii) the Internet diffusion process is dynamic which makes static estimators inconsistent, iii) Internet adoption starts later but goes faster in developing countries, iv) inflows of the foreign investment and better human capital boost the diffusion of Internet for the developing countries only and v) GDP per capita has a negative impact on Internet diffusion in the developing countries and a positive impact in developed countries. This last finding seems surprising but it is consistent with the conditional convergence hypothesis as well as with the resource curse theory.
|Date of creation:||Jun 2008|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- David Roodman, 2009.
"A Note on the Theme of Too Many Instruments,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 71(1), pages 135-158, 02.
- R Blundell & Steven Bond, .
"Initial conditions and moment restrictions in dynamic panel data model,"
W14&104., Economics Group, Nuffield College, University of Oxford.
- Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- 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.
- 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.
- 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.
- 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.
- David Roodman, 2006. "How to Do xtabond2," North American Stata Users' Group Meetings 2006 8, Stata Users Group.
- repec:reg:rpubli:343 is not listed on IDEAS
- Sampsa Kiiski & Matti Pohjola, 2010.
"Cross-country Diffusion of the Internet,"
- Arellano, Manuel & Bover, Olympia, 1995.
"Another look at the instrumental variable estimation of error-components models,"
Journal of Econometrics,
Elsevier, vol. 68(1), pages 29-51, July.
- M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
- Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
- Andres, Luis & Cuberes, David & Diouf, Mame Astou & Serebrisky, Tomas, 2007. "Diffusion of the internet : a cross-country analysis," Policy Research Working Paper Series 4420, The World Bank.
- Wallsten, Scott, 2003. "Regulation and internet use in developing countries," Policy Research Working Paper Series 2979, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:9413. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.