Investigating the Multifaceted Factors Influencing Information and Communications Technology (ICT) Growth
Research question
Besides the level of economic development (GDP per capita), which factors are most strongly associated with differences in internet usage across countries and over time?
- Motivation
- Much of the literature treats ICT as a driver of economic growth. This thesis reverses the lens and treats ICT growth as an outcome shaped by social, economic and political conditions, bringing educational inequality, political competition and foreign direct investment into the same model as income.
- Data
- Individuals using the internet (% of population) and FDI net inflows from the World Bank’s World Development Indicators; educational inequality (a Gini coefficient originally from Clio Infra), political competition (originally from Polity 5) and GDP per capita, all obtained through the V-Dem dataset.
- Sample
- A combined panel covering 218 countries. The main fixed-effects model is estimated on 2,592 country-year observations from 124 countries; the educational-inequality series ends in 2010, and the period-specific models cover 1991–2000 and 2001–2010.
- Methods
- Panel regression with country and year fixed effects, estimated in Stata
- Robust standard errors clustered by country
- Alternative specifications: Liberal Democracy Index in place of political competition; total GDP in place of GDP per capita
- Dynamic specifications: a lagged dependent variable, and first and second differences of internet usage
- Separate models for 1991–2000 and 2001–2010
- Separate models for nine V-Dem world regions (the Pacific had too few observations)
- Main findings
- GDP per capita was positively associated with internet usage in the main model (coefficient 3.245 percentage points per US$1,000; p < 0.01) and stayed positive and significant in every other specification that included it. It was the most consistent correlate across regions, although it was not significant in every region.
- FDI net inflows were positively associated with internet usage (coefficient 0.0544 percentage points per US$1 billion; p < 0.01). The coefficient was larger for 1991–2000 than for 2001–2010 and was not significant once lagged internet usage was included.
- Educational inequality had a positive, statistically significant coefficient in the main model (0.773; p < 0.01), which the thesis interprets as internet use being concentrated among more educated groups in unequal societies. The sign and significance varied by region — for example, negative (at the 10% level) in Eastern Europe and Central Asia.
- Political competition was negatively associated with internet usage in the main model (−0.031; p < 0.01), but the coefficient was not significant with a lagged dependent variable or in either period-specific model, and it was positive (at the 10% level) in East Asia.
- Model fit the main model reported an R² of 0.791.
- My contribution
- Sole author: formulated the research question, assembled and merged the World Bank and V-Dem data, specified and estimated all models in Stata, and interpreted the results.
- Limitations
- Results are associations; possible reverse causality (for example, between income and ICT adoption) means they should not be read as causal effects.
- Reliance on secondary data brings missing observations and cross-country differences in measurement.
- Relevant factors such as culture and informal governance are not measured.
- Heterogeneity across regions limits how far global estimates generalise to individual countries.
- Fixed effects remove only time-invariant differences between countries.
- Status
- Completed — MSc thesis (degree awarded 2025)
- Keywords
- ICT
- digital inclusion
- educational inequality
- political competition
- FDI
- economic development
- internet penetration