Digital divide, globalization and income inequality in sub-Saharan African countries: analysing cross-country heterogeneity

Abstract

PurposeThis study aims to analyse the impact of digital divide (DD) on income inequality in sub-Saharan Africa over the period 2004–2016.Design/methodology/approachIn applying a finite mixture model (FMM) to a sample of 35 sub-Saharan African (SSA) countries, this study posits that DD affects income inequality differently.FindingsThe findings show that the effect of DD on income inequality varies across two distinct groups of countries, which differ according to their level of globalization. In addition, the study shows that most globalized countries are more inclined to be in the group where the effect of DD on income inequality is negative. The results are consistent with several robustness checks, including alternative measures of income inequality and additional control variables.Originality/valueThis study complements that extant literature by assessing linkages among the DD, globalization and income inequality in sub-Saharan African countries contingent on cross-country heterogeneity.