The Digital Divide: Current and Future Research Directions - MISRC ...

1998. In addition to economic wealth (GDP per capita), she reports that
telecommunications policy is an important predictor of Internet penetration. Specifically,
telecommunications industry structure (monopoly versus competition), pricing, and
phone density have varying degrees of significance in explaining Internet penetration.
Dasgupta et al. [2001] also study Internet penetration in a total of 44 countries,
including both developed countries (OECD countries, along with Korea, Singapore and
UAE) and developing countries (from Asia, Eastern Europe and Latin America), over the
period 1990 to 1997. 5 Urban population and competition policy are important
determinants of Internet intensity, which is defined as the ratio of Internet subscriptions
to telephone mainlines. Surprisingly, they find no gap between developed and
developing countries in terms of Internet intensity. In other words, among those with
telephone access, the proportion subscribing to the Internet is not different in developing
countries as compared to developed countries. However, there is an absolute gap in
Internet connectivity, defined as the number of Internet users per capita. This suggests
that available and affordable telecommunications access is a key prerequisite for Internet
penetration. A technical point is that how the digital divide is measured can have a
strong influence on what conclusions are drawn.
Kiiski and Pohjola [2002] examine Internet penetration in 23 OECD and 37
developing countries, over the period 1995 to 2000. Using a Gompertz model of
technology diffusion, they find that GDP per capita and Internet access cost are the
biggest drivers of Internet host penetration. Education is significant for developing
countries, but not for developed countries. Wallsten [2003] makes the interesting point
that regulations of Internet use in developing countries themselves have important
implications for Internet penetration in those countries. Analyzing data from a survey of
telecommunications regulators in 45 developing countries, Wallsten [2003] finds that
increased regulation of Internet service provider (ISP) entry results in reduced Internet
users and hosts, while heavier pricing regulations generally result in higher Internet
access prices.
Some of the most recent research has examined the penetration of multiple
information and communication technologies. For example, Chinn and Fairlie [2004]
5 They do not provide a detailed breakdown of countries in each of the categories.
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