Evolution and determinants of digital divide in Brazil (2005–2013)

During the last decades, the widespread growth of information and communication technologies (ICT) has posed incentives to broaden the participation of individuals in social, political and economic dimensions of life. However, utilization of ICT also involves access to technology and infrastructure, and acquisition of skills to deal with innovations and, thus, digital literacy is, primarily, a complementary good. The digital divide expresses inequalities in access and utilization of ICT among individuals and populations in different countries. The study adopts inequalities indexes of Internet access and mobile phone ownership to measure use of ICT goods, accounting for the digital divide in Brazil. The inequality indexes are also split according to main determinants using four nationally representative survey data from 2005 to 2013. Results indicate that the digital divide among individuals is decreasing quite fast among Brazilians over time. However, there is room for policies of mass access to ICT goods based on mobile Internet broadband access. In addition, digital illiteracy, evaluated by lack of education, is one of the main determinants of the digital divide in the country, especially among elderly individuals.     

Digital divide and financial development in Africa

This paper analyses the influence of the digital divide on the new IMF financial development index on a panel of 34 African countries over the period 2005–2017. Using the instrumental variables technique, we arrive at the main result that ICT divide is a severe handicap for the financial systems development in Africa. The use of financial development sub-indices relating to financial institutions and financial markets, as well as their dimensions confirms the negative effect of the digital divide. Our result remains stable when we use alternative measures of financial development and ICT indicators. Furthermore, we found that the digital divide between countries is also a severe handicap for the financial development of countries lagging behind. On the other hand, countries with a technological lead or a digital dividend have relatively developed financial systems. Some recommendations have been suggested to promote digital penetration in Africa, as well as to improve the receptivity and flexibility of African financial systems.     

Development of telecommunication and broadcasting infrastructure indices at the global level

The importance of information and communication technology (ICT) in economic development has been increasing rapidly along with the Internet and mobile telecommunication networks. ICT development is becoming a main growth factor of many countries. As they realize the importance of the ICT industry, developing nations work to catch up with established economies. Therefore, many nations are formulating an ICT-enhanced policy. This paper introduces a number of telecommunication and broadcasting sub-indices, which include the fixed telephone network, the Internet, and mobile networks, which are aggregated into a composite Telecommunication Index (TI). The indices are computed using principal component analysis and human development type index methods. The country rankings, by different ICT-related indices, help identify the strengths and weaknesses of infrastructure development such that each country can foster economic growth. The performance of TI is compared with several other indices, such as the digital access, human development, and ArCo technology indices. The type of indices affects the country ratings. Results suggest that the parametric index approach may be preferred over those methods in which the subjective weighted summation of normalized variables used (non-parametric indices).     

Measurement and characterisation of the Digital Divide of Spanish regions at enterprise level. A comparative analysis with the European context

Until now, a reduced number of research is observed on the adoption and use of ICTs in enterprises and on the digital divide (DD) between them at regional scale in Europe. What is meant by DD are the differences in the levels of digital development of the enterprises; being the digital development the degree of adoption and use of ICTs and e-commerce by the firms. The aim of this piece of work is to characterise and measure the DD in the Spanish regions and those in the countries of the European Union based on the data of their enterprises with more than 10 employees which have used ICTs. The methodology is developed in the following stages: 1) Construction of a synthetic index of digital development (Enterprise Digital Development Index –EDDI-) for countries in the EU and Spanish regions. The production of this index is carried out based on the factors obtained with the factor analysis (FA) with the aim of identifying the key variables which define the different EDDI components. These variables come from the “Community survey on ICT usage and e-commerce in enterprises” of Eurostat. 2) Classification of Spanish regions into the groups of European countries with a similar level of EDDI components based on the discriminant analysis. Those groups are previously obtained by using cluster analysis. And 3) Comparative analysis of the DD between the Spanish regions and those in countries of the EU based on EDDI components and the identified groups. The study provides a synthetic index (EDDI) at European scale comprising 3 dimensions which permits obtaining: i) a ranking from more to less digital development of countries and regions permitting the measurement of the DD among them is established; and ii) a typology of European countries and Spanish regions is defined according to the 3 dimensions of EDDI. The main results of this piece of work show that the Spanish regions at enterprise level: i) are in a medium or higher level of digital development than their European counterparts, presenting, furthermore, a lower DD between them in relation to what happens in European countries; ii) stand out for having a higher digital inclusion than European countries in the ICTs related to infrastructures of internet access and for the interaction with the public authorities; and iii) have a digital development deficit in the integration of ICTs for e-commerce.     

Assessment of information and communications technology maturity level

The use of information and communications technology (ICT) turned out to be a key factor in the process of the wider development of a country. It is therefore very useful to estimate ICT evolution by the means of an appropriate metric. Based on statistical data from 159 countries, the ICT maturity level index (IMLI) is proposed and estimated by using structural equation modelling (SEM). This index is a metric measuring the information society in a country and consists of three sub-indices which are access, use and skills. It is an improvement of the ICT development index, proposed by the ITU in 2009. The analysis divides the countries into two groups, the developed and the developing, due to major disparities in their statistical data. The criterion used to define the groups was the income, as expressed by the Gross National Income per capita. The impact of a number of influential parameters on the ICT maturity level is evaluated and it becomes obvious that there is a substantial difference in their impact between developed and developing countries. Finally, a procedure that allows the ranking of the countries, based on IMLI, is presented.     

Fixed-to-mobile substitution in the European Union

This paper analyzes substitution between access to fixed-line and mobile telephony in the European Union using cross-section panel data on households’ choices of telecommunications technologies in years 2005–2010. We estimate a structural model of household?s demand for access to: (i) fixed-line only; (ii) mobile only; and (iii) both fixed-line and mobile. We find that growing Internet usage increases the share of ‘fixed + mobile’ households, which suggests that households keep their fixed-line connection to access Internet. However, the spread of 3G and cable broadband access decreases the share of ‘fixed + mobile’ households and increases the share of ‘mobile only’ households. Hence, fixed-to-mobile substitution was slowed down by the spread of Internet but it may continue with the spread of mobile broadband. Furthermore, bundling of telecommunications services increases the share of ‘fixed + mobile’ households and decreases the shares of ‘mobile only’ and ‘fixed only’ households. Therefore, operators which can bundle fixed-line connection with Internet or mobile services may slow down fixed-to-mobile substitution.     

The impact of trade liberalization in telecommunications services: The case of APEC countries

This paper examines the impact of liberalizing the telecommunications services sector on investment and output in the Asia-Pacific Economic Cooperation (APEC) countries by estimating a system of four structural equations that takes into account the causal relationship between national income and telecommunications infrastructure. The degree of openness to trade in telecommunications is represented by a carefully constructed index that reflects a country’s trade and investment policy in terms of market access, national treatment and regulatory principles. One interesting finding from the empirical analysis is that the effects of trade liberalization depend on the risk rating of a country. In countries with relatively high risk ratings liberalization reduces investment in telecommunications.     

Do ICTs drive wealth inequality? Evidence from a dynamic panel analysis

Surprisingly, little is known about the cross-country effect of information and communication technology (ICT) on wealth inequality. At the same time, there is some tentative evidence suggesting that information and communication technology is positively correlated with income inequality. However, whether and how ICT affects wealth inequality is less explored, particularly because of the lack of reliable data on wealth inequality. This paper, therefore, fills this gap and contributes to this new literature by investigating the effect of ICT on wealth inequality in a sample of 45 developed and developing countries over the period 2000–2017. ICT is measured with six different indicators (including internet penetration, mobile penetration, ICT service exports, the ICT index, ICT quality, and ICT quantity), while wealth inequality is measured with three different indicators (comprising billionaire wealth to GDP, the Top 1% wealth share, and the Top 10% wealth share). The empirical analysis is based on the Generalised Method of Moments, and the results show that ICT increases wealth inequality. Furthermore, we show that democracy mitigates the increasing effect of ICT on wealth inequality. This result suggests that improving democracy in both developed and developing countries is an effective mechanism for mitigating the effects of ICT on wealth inequality. Therefore, we encourage efforts to implement democratic institutions that ensure respect for citizens' freedoms, greater democratic accountability, and executive constraints that allow for a more egalitarian distribution of wealth.     

It's all B2B…and beyond: Toward a systems perspective of the market

The delineation of B2B from ‘mainstream’ marketing reflects the limitations of the traditional, goods-dominant (G-D) model of exchange and a conceptualization of value creation based on the ‘producer’ versus ‘consumer’ divide. Service-dominant (S-D) logic broadens the perspective of exchange and value creation and implies that all social and economic actors engaged in exchange (e.g., firms, customers, etc.) are service-providing, value-creating enterprises; thus, in this sense, all exchange can be considered B2B. From this perspective, the contributions of B2B marketing (and other sub-disciplines) can be seen as applicable to ‘mainstream’ marketing. This generic, actor-to-actor (A2A) orientation, in turn, points toward a dynamic, networked and systems orientation to value creation. This article discusses this systems-oriented framework and elaborates the steps necessary for developing it further into a general theory of the market, informed by the marketing sub-disciplines, marketing practices, and disciplines external to marketing.     

Broadband achievement index: Moving beyond availability

High-speed access to the Internet enhances economic prosperity, social development and global competitiveness. Significant progress has been made in broadband deployment in the last decade. Nevertheless, there are increasing gaps in broadband adoption, use and speed between, as well as within, the states. Federal and state legislators and regulators currently use a number of indicators such as adoption, availability and speed to track states’ progress in broadband diffusion in order to design appropriate policy responses. Single indicators, however, when analyzed individually, fall short of capturing multi-dimensional aspects of broadband diffusion and, thus, do not provide an integrated and easily comprehensible picture of states’ advancement. To monitor states’ overall progress it is useful to aggregate various indicators into a composite index that could measure the overall extent of broadband diffusion. A composite index can also provide with an important benchmark for designing policies to improve states’ overall performance. This paper offers a flexible framework for benchmarking states’ achievement in broadband diffusion by proposing a composite Broadband Achievement Index (BAI). The index combines several key performance indicators: broadband availability, adoption, competition, speed and the dispersion of broadband adoption within the states utilizing FCC's Form 477 data and the recently collected census block level broadband availability data from NTIA. The purpose is to provide a more comprehensive picture of where the states stand in their evolution toward high-performance America by measuring each state's current broadband achievement relative to other states and providing an important benchmark for assessing state-specific needs. The indicators are combined using the Benefit of the Doubt (BOD) methodology (Cherchye, Moesen, & Van Puyenbroeck, 2004). The methodology is founded on the premise that, absent a consensus on social policy priorities, that are, on which indicators are more important and should be given higher weights in the index, each state is granted leeway for deciding how to weigh its own indicators and the most favorable weights for indicators are determined for each state. A good relative performance in a particular dimension is seen as revealed evidence of setting high state policy priority to that indicator, when each state's specific policy priorities are unknown. Additionally, the Second Order Stochastic Dominance (SOSD) methodology is used to compare the dispersion of adoption in the states. Using SOSD the states are ranked under the assumption that proportionally higher and more equally distributed adoption rates are better.     

ICT adoption,innovation, and SMEs’ access to finance

This study examines the association between ICT adoption, innovation, and SMEs' access to finance by exploiting the World Bank Enterprise Survey (WBES) data of 171,000 SMEs from 149 countries between 2006 and 2020. We decompose SMEs' access to finance into two components, i.e., basic and advanced access to finance. Basic access to finance is captured from two indicators; namely, the firm's bank account and line of credit from a financial institution, while advanced access is captured by whether the firm's investments and working capital is financed by the bank. Consistent with the information asymmetry hypothesis, our findings confirm that ICT adoption reduces information asymmetry between SMEs and banks. Therefore, banks are more likely to grant credit and to finance projects and the working capital needs of innovative SMEs. Moreover, this study complements the argument of resource-based theory (RBT) and suggests that innovation can provide a competitive advantage with regard to a firm's access to credit. These results imply that SMEs with greater access to and use of new technologies are more likely to acquire financial resources from banks. The results hold to various robustness checks and identification strategies. Our findings provide important policy implications for SMEs around the globe.     

Internet diffusion in sub-Saharan Africa: A cross-country analysis

In this paper, the notions of digital inequality and digital divide have been employed to describe two levels of Information and Communications Technologies (ICTs) access. On the one hand is the inequality of access to the cluster of technology measured by Internet use and on the other are the confluence of skills and other resources that differentiate countries in sub-Saharan Africa. Using cross-country data, hypotheses are tested within a simultaneous equation system. The paper confirms the vital importance of telecommunications infrastructure represented by the high correlation of telephone density with Internet irrespective of per capita income level of the country.     

Disparities in ICT adoption: A multidimensional approach to study the cross-country digital divide

This paper presents a cross-country study on the determinants of information and communication technology (ICT) diffusion using multivariate analysis techniques to capture the relative and multidimensional character of digital divide. Using canonical correlation analysis, the differences detected between groups of countries both in terms of ICT patterns and in terms of the factors explaining each are compared. The results provide the ability to distinguish between different patterns of ICT adoption that can be explained primarily by variables associated with differences in development levels. In countries registering higher levels of ICT adoption, the digitalization pattern is explained by GDP, service sector, education, and governmental effectiveness. In contrast, in developing countries, population age and urban population are positively associated with the ICT adoption, while Internet costs impact negatively. The results might be useful in finding and implementing the most suitable telecommunication and development policies for each case.     

Information and communications technology infrastructure and firm growth: An empirical study of China's cities

Despite the importance of information and communications technology (ICT), previous studies of the business value of information technology have yielded mixed results. This study provides new empirical evidence that demonstrates the impact of cities' ICT on firm performance. A series of panel datasets are assembled to measure the improvement of city's ICT infrastructure and the change of firm performance during the years 2001–2016 in China. The findings demonstrate that city's ICTs positively promoted firm performance, including financial profitability, marketing performance and innovation performance. Instrumental variables are employed to verify the positive impact of city's ICTs infrastructure on firm profitability. Taking advantage of an exogenous variation of telecommunications upgrade as a natural experiment, this study uses the difference-in-difference approach to establish causality between cities' ICT infrastructure and firm profitability. Mechanisms are explored, which shows that better labour quality, lower costs and higher transparency are the three possible channels through which ICTs influence firm profitability.     

Assessing the regional digital divide across the European Union-27

Despite the efforts devoted to the analysis of the digital divide over the last years, the regional evidence on this issue is still scarce. Within this context, the goals of this paper are twofold: (1) measuring the digital divide across the regions of the 27 Member States and within each country and (2) explaining the observed regional disparities. The analysis leads to identify Dutch regions as the Top-10 in ICT, while Greece and Bulgaria occupy the Bottom-10. Therefore, results show that the regional digital divide reflects to some extent the income gap. However, regional policy seems to be having some positive implications for technology adoption. In particular, the rural-versus-urban dimension of the digital gap appears to be less important than it is usually claimed to. Likewise, some evidence is found of the role of cultural and institutional factors in ICT adoption, an issue that has not been previously analyzed at the regional level.     

Do R&D and ICT affect total factor productivity growth differently?

We analyze the effect of ICT and R&D on total factor productivity (TFP) growth across different industries in Sweden. R&D alone is significantly associated with contemporaneous TFP growth, thus exhibiting indirect effects. Although there is no significant short-run association between ICT and TFP, we find a positive association with a lag of seven to eight years. Thus, R&D affect TFP much faster than ICT-investments. We also divide ICT capital into hardware and software capital. To our knowledge, this distinction has not been made in any previous study analyzing TFP at the industry level. The results show that lagged hardware capital services growth is significantly associated with TFP growth. Hence, investments complementary to hardware are needed to reap the long-run TFP effects from reorganizing production.     

Does ICT investment widen the growth gap?

This paper builds a model of cumulative growth to examine the dynamic interdependent relationship between Information and Communication Technology (ICT) investment and economic growth for a sample of 29 countries in the 1990s. We confirm the following facts: First, there is a positive correlation between ICT investment and economic growth. Second, non-ICT investment has as much influence on the growth gap as ICT investment. Third, those countries with a solid economic infrastructure and open trade regime experience more active ICT investments. Fourth, those countries with a comparatively lower productivity level can reduce the gap using knowledge spillovers from more advanced countries. Fifth, reinforcement of patent rights has a positive influence on economic growth by stimulating the accumulation of ICT capital. Finally, ICT investment does not have a strong interdependent relationship with economic growth, while non-ICT investment has a cumulative causal relationship with economic growth and plays a key role in the process of widening the growth gap.     

Web-hosting market development status and its value as an indicator of a country's e-readiness

A country's e-readiness is essentially a measure of its business environment, a collection of factors that indicate how amenable a market is to Internet-based opportunities. An e-readiness assessment is based on several quantitative criteria, and among them the ICT market development indicators are considered as the most influential. Studies in the past have shown that the well-known indicators used for assessing the level of ICT market development in countries with emerging economy are not directly applicable. This paper provides another insight into the level of ICT market development in an emerging economy by analysing the adoption of web-hosting services in the country's business sector. The potential of such assessment to be as an indicator of the level of ICT development in a country is analysed. The underlying study of the web-hosting development was carried out as part of the European project WEBHOSTS. The approach applied and the findings were intended to be used as a decision support in locating and managing some of the risks in e-business development and potential investment by new entrants in a region that is accessing the developed part of Europe.     

Does strategy matter? A comparison of broadband rollout policies in Finland and Sweden

This study investigates broadband policies applied in Finland and Sweden with special reference to the geographical coverage of the required network infrastructure. These two Nordic countries are seen as forerunners in the development of the information society, and they also share several other similarities bearing relevance to the take-up of broadband. However, they have applied different broadband strategies: Sweden, one of the first-movers in this field, already launched its ambitious and interventionist national ICT infrastructure program in 2000, whereas the Finnish broadband strategy, published in 2003, largely relies on market forces. The present article analyses these broadband strategies, and attempts to identify their actual differences. It appears that the Finnish strategy caused temporary higher broadband prices and a somewhat slower rollout. However, the current results of the two countries’ strategies in terms of coverage and usage levels, as well as end-user prices, do not indicate any significant long-term policy-induced impacts.