Do Poor Countries Really Need More it? The Role of Relative Prices and Industrial Composition
37 Pages Posted: 20 Apr 2016
Date Written: June 30, 2015
Abstract
Conventional wisdom suggests too little information and communication technologies (ICT) in poor countries. Indeed, within 70 countries at various levels of development, there is a positive relationship between income per capita and the capital share of ICT. While this regularity is consistent with explanations based on technology adoption lags and ICT-labor substitutability, there is little empirical support for these hypotheses. Instead, the paper establishes that this regularity can be fully accounted for by (a) relatively higher ICT prices in low-income countries and (b) industrial composition.
Keywords: Economic Growth, Industrial Economics, Economic Theory & Research, Information Technology
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