The Effect of Economic Factors on Internet Diffusion in Developing Countries

Document Type : Research Paper


1 Associate Professor of Economics, University of Tabriz

2 Ph.D. Student in Economics, University of Tabriz


The purpose of this study is to investigate the effects of economic variables on the internet diffusion in thedeveloping countries. For this purpose a dynamic panel datamodel (GMM) has been estimated overthe period 1995- 2012 and among 123 developing countries. The results show that per capita income, the rate of urbanization, trade openness and human capital have a significant and positive effect on the internet diffusion. Moreover, the results indicate that the impact of ICT infrastructure on the internet diffusion is significant and positive. The results of a sensitivity analysis also reveal that increasing the share of the service sector of GDP increases the internet diffusion; while, an increase in the share of the agricultural sector has a negative effect on the internet diffusion.



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