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

38 Pages Posted: 10 Mar 2004

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

University of California, Santa Cruz - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: September 2004

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 can mitigate the gap in PC and Internet use.

Keywords: Computers, Internet, digital divide, infrastructure, pricing, regulation

JEL Classification: 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 (September 2004). IZA Discussion Paper No. 1305; Yale University Economic Growth Center Discussion Paper No. 881; UC Santa Cruz Economics Working Paper No. 562. Available at SSRN: https://ssrn.com/abstract=510182

Menzie David Chinn

University of Wisconsin, Madison - Robert M. La Follette School of Public Affairs and Department of Economics ( email )

1180 Observatory Drive
Madison, WI 53706-1393
United States
608-262-7397 (Phone)
608-262-2033 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Robert W. Fairlie (Contact Author)

University of California, Santa Cruz - Department of Economics ( email )

Department of Economics
Engineering 2 Bldg.
Santa Cruz, CA 95064
United States
831-459-3332 (Phone)

HOME PAGE: http://econ.ucsc.edu/~fairlie/

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