Abstract
China’s Internet industry has boomed over the last two decades. Given that China is home to the world’s largest Internet population, we may wonder what factors have caused this medium, which is strictly controlled in China, to grow and flourish. Based on previous studies and theories, a framework called EPIC (Economy-Policy-Infrastructure-Content) is proposed, and a multivariate time series analysis is performed to examine the relationships between Internet diffusion and these factors. The growth of Internet penetration was found to be mainly driven by Internet content and access cost; however, GDP per capita and telecommunications infrastructure were inconsequential. The implications of these findings are discussed.
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