Working Paper
Cross-country Diffusion of the Internet

This paper investigates the factors which determine the diffusion of the Internet across countries. The Gompertz model of technology diffusion is estimated using data on Internet hosts per capita for the years 1995-2000. For a sample of the 0ECD countries, the basic finding is that GDP per capita and Internet access cost explain best the observed growth in computer hosts per capita. Competition in telecommunications markets does not seem to exert any independent influence on Internet penetration. Neither is investment in education a statistically significant predictor of its diffusion. For a larger sample of both industrial and developing countries, the results change in such a way that also education becomes significant.