Long Term Factors of Internet Diffusion in Sub-Saharan Africa: A Panel Co- Integration Analysis

Abstract

Identifying factors that influence the diffusion of the Internet is paramount for researchers as well as policy makers in articulating strategies to improve the availability and subsequent use of the Internet. Most existing empirical studies have focused on this problem by analyzing diffusion data for countries for one fixed year and identified variables affecting the Internet diffusion. These variables, generally, come from the economic, technological, policy, culture, and human capital realms. These results have provided a good “snapshot” of what factors are important towards the diffusion of the Internet and the results tend to vary for studies conducted in different time frames. This paper also addresses, the phenomenon of cross-country dependence – the economic, political, and technological environment of one country affecting other countries- into account in their analyses. This paper, for the first time in the literature, empirically identifies long-term determinants of the Internet diffusion in sub-Saharan African (SSA) countries by considering data for the period 1997-2013. It employs a recently-developed technique named “panel co-integration analysis” to model the diffusion of the internet among the SSA countries. The analysis reveals that in SSA countries, the number of telephones, the level of per capita real gross product and the extent of ruralization (conversely, the degree of urbanization) are the key long-term drivers of the diffusion of the Internet. Finally, the paper concludes with a discussion of policy implications.