The Determinants of the Global Digital Divide: A Cross-Country Analysis of Computer and Internet Penetration

Posted: 29 Feb 2008

See all articles by Menzie David Chinn

Menzie David Chinn

University of Wisconsin, Madison - Robert M. La Follette School of Public Affairs and Department of Economics; National Bureau of Economic Research (NBER)

Robert W. Fairlie

UCLA; National Bureau of Economic Research

Multiple version iconThere are 3 versions of this paper

Date Written: January 2007

Abstract

To identify the determinants of cross-country disparities in personal computer and internet penetration, we examine a panel of 161 countries over the 1999 2001 period. Our candidate variables include economic variables (income per capita, years of schooling, illiteracy, trade openness), demographic variables (youth and aged dependency ratios, urbanization rate), infrastructure indicators (telephone density, electricity consumption), telecommunications pricing measures, and regulatory quality. With the exception of trade openness and the telecom pricing measures, these variables enter in as statistically significant in most specifications for computer use. A similar pattern holds true for internet use, except that telephone density and aged dependency matter less. The global digital divide is mainly but by no means entirely accounted for by income differentials. For computers, telephone density and regulatory quality are of second and third importance, while for the Internet, this ordering is reversed. The region-specific explanations for large disparities in computer and Internet penetration are generally very similar. Our results suggest that public investment in human capital, telecommunications infrastructure, and the regulatory infrastructure may mitigate the gap in PC and Internet use.

Keywords: JEL classifications: O30, L96

Suggested Citation

Chinn, Menzie David and Fairlie, Robert W., The Determinants of the Global Digital Divide: A Cross-Country Analysis of Computer and Internet Penetration (January 2007). Oxford Economic Papers, Vol. 59, No. 1, pp. 16-44, 2007, Available at SSRN: https://ssrn.com/abstract=1098697 or http://dx.doi.org/10.1093/oep/gpl024

Menzie David Chinn (Contact Author)

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Robert W. Fairlie

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