The global digital divide revisited (2000-2004)

Abstract

This paper examines the determinants of the “digital divide” using a macro panel data set of 188 countries over the period 1990-2004. Prior research shows that the “digital divide” relates to economic development, education, regulatory environment, internet costs, enforcement, personal computers, spoken language, and digital communications infrastructure, this paper also demonstrates that differences in the distribution of income (inequality) within countries can play a vital role when explaining the “digital divide”. Moreover, this effect can be so strong that, according to our results, the negative inequality effect may tend to exceed a possible positive direct income effect on Internet and personal computers diffusion processes. As a consequence, a reduction in income disparities can be essential to promote ICTs diffusion. Our results also suggest that an increase in the public investment in human capital as well as an effort in the promotion of markets openness can considerably reduce the “digital divide”.