NET Institute Working Paper No. 10-24
A country’s human capital and economic productivity increasingly depend on the Internet due to its expanding role in providing information and communications. This has led to a search for ways to increase absolute levels of Internet access and narrow the disparity in access across countries – the global “digital divide.” Previous work has focused primarily on demographic, economic, and infrastructure determinants of Internet access that are difficult to change in the short run. In contrast, Internet content is a tool that increases adoption and can be changed more quickly; however, the magnitude of its impact on adoption and therefore its effectiveness is previously unknown.
Quantifying content’s role is challenging because there is a positive feedback loop (network effects) between content and adoption: more content stimulates adoption which in turn increases the incentive to create content. We develop a methodology to overcome this endogeneity problem and accurately measure content’s impact. We find a statistically and economically significant effect, implying that policies promoting content creation can substantially increase Internet adoption even in the short run. Because it is ubiquitous, this also means that Internet content is a useful tool to affect social change across countries.
We also find that content has a greater effect on adoption in countries with more disparate languages, making it a useful tool to overcome linguistic isolation, and in countries with international Internet gateways, underlining the importance of building high-speed infrastructure to deliver content.
Date of Authorship for this Version
Internet, technology adoption, economic development, two-sided markets, network effects, technology diffusion, digital divide, language
Viard, V. Brian and Economides, Nicholas, "The Effect of Content on Global Internet Adoption and the Global “Digital Divide”" (2011). New York University Law and Economics Working Papers. Paper 248.