Socio-economic determinants of digitalisation and internet penetration: A cross country analysis

Internet has become a lifeline for national and global economy that provides opportunity to the corporates and the customers to make informed choices besides accelerating their speed and efficiency. Despite of its rising importance, there are still many countries where internet penetration is very less and affecting their present and future growth prospects. The present paper aims to identify socio-economic determinants of cross-country disparities in Internet penetration by examining a set of 18 countries which have more than 1% of the total world population. The study includes variables like GDP per capita, literacy rate, Percentage of population in the age group of 15–64, Level of urbanization, Telephone density, Trade in goods as percentage of GDP, consumption of electricity per capita, Personal computers per 100 people and Percentage of English speaking population in the country. Step wise regression analysis has been carried out to examine the relative importance of these variables in determining the overall variability in internet penetration across nations. The study concludes that Gross Domestic Product per capita along with telephone density, mobile cellular subscriptions and possession of personal computers together explain 85% of variations in internet penetration across these eighteen nations. However, Percentage of English speaking population, Percentage of population in the age group of 15–64,level of urbanisation, literacy rate and trade in goods as percentage of GDP emerged to be relatively insignificant variables. The study suggests that greater public investment in telecommunications Infrastructure especially in developing countries can help to mitigate the problem of global digital divide.