Development of the ICT sector and the determinants of Internet use in the Southern Caucasus

Abstract

This paper examines Internet use in the Southern Caucasus by qualitative and quantitative methods. Firstly, as the developments in ICTs affect Internet use, the macroeconomic problems faced in the development of the sector are qualitatively analyzed. It is seen that high Internet service prices, government dominance, and lack of competition in the ICT sector as well as the wars in some regions are obstacles to Internet use. Finally, the determinants of Internet use are explored using survey data and employing microeconometric techniques considering sample selection. The empirical findings, inter alia, indicate that key variables contributing to frequent Internet use are computer ability in Armenia and computer ownership in Azerbaijan, and mobile phone ownership in Georgia.