What Drives ICT Diffusion in Developing Countries? Evidence from Paraguay

Abstract

The diffusion of Information and Communication Technologies (ICTs) has been identified by international policy-makers and scholars as an important driver for economic development. In this perspective, research on the determinants of technology adoption appears particularly relevant. However, while the empirical literature on ICT adoption in workplace is relatively abundant, few studies have been elaborated on their penetration in households. Additionally, academic work has focused on industrialized countries and it is still missing a comprehensive analysis on developing world. In this paper we contribute to fill this gap, evaluating the main socio-economic determinants of the presence of computer and Internet connection in Paraguayan households. Non-parametric statistics show that Paraguay has relatively low levels of ICT penetration. Moreover, technology diffusion follows a heterogeneous pattern, reflecting pre-existing inequalities in other socio-economic dimensions. Econometrically, we model the probability that a household has or has not adopted computer technologies and Internet access. The results confirm that conventional variables such as income and education are key determinants of ICT diffusion, but there is also evidence of the presence of geographical network effects and of complementarities between Internet use at different locations.

Keywords: Computer adoption, Internet access, Sample selection, Paraguay

JEL Classification: L63, O33, O54, C24