Macro-geographic location and internet adoption in poor countries: What is behind the persistent digital gap?

Dirk Dohse and Cheng Yee Lim

No 2067, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The paper investigates the determinants of Internet adoption in poor countries, focusing on the role of macro-geographic location (neighborhood). It is argued that neighboring countries are interconnected by various kinds of spillovers, including knowledge spillovers as well as spillovers of norms and attitudes that affect individual adoption behavior. The empirical findings support the view that Internet adoption is affected by adoption rates in neighboring countries, even when controlling for a wide range of covariates. Addressing potential endogeneity concerns using an instrumental variables approach moreover suggests these relationships to be causal. The findings imply that international policies to support Internet adoption in poor countries might be more effective if they target groups of neighboring countries rather than single countries in order to better exploit spillovers between neighboring countries.

Keywords: internet adoption; poor countries; macro-geographic location; spillovers (search for similar items in EconPapers)
JEL-codes: L96 O30 R10 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-geo, nep-ict and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:2067

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