Across the Digital Divide: A Cross-Country Multi-Technology Analysis of the Determinants of IT Penetration

Abstract

This paper studies the country-level digital divide across successive generations of IT, providing detailed insights into the magnitude and changing nature of the divide. We examine a panel of 40 countries from 1985-2001, based on data from three distinct generations of IT: mainframes, personal computers, and the Internet. Using two measures of IT penetration, we conduct an empirical investigation of socio-economic factors driving the digital divide. We find that IT penetration is positively associated with national income for all three technology generations, and the association between penetration and income is stronger for countries with higher levels of IT penetration. We also examine other demographic and economic factors, going beyond income, and find significant differences in the nature of their effects across countries at different stages of IT adoption. Importantly, factors that previously may have been expanding the divide with earlier technologies are narrowing the gap as the Internet becomes the defining technology of the Information Age.