An Empirical Study On The Determinants Of Cross-country Mobile Internet Diffusion

With the rapid development of economy and technology,the rate of mobile cellular penetration has steadily increased on an annual basis.As users shift from computers to mobile phones to access the Internet,mobile Internet has found its way to spread all over the world.From a political perspective,mobile Internet plays an important role in reviving participatory democracy at a national level.From a social perspective,the new medium is expected to act as a moderator of inequality by making low-cost information available to everyone without discrimination.However,there is a huge gap between developed and developing countries in terms of mobile Internet penetration.In brief,the digital divide still exists.Considering the status quo of the digital divide,this thesis presents an empirical study on the determinants of cross-country diffusion of mobile Internet,with the aim of identifying significant contributing factors among a variety of factors.This thesis proposes a four dimensional empirical framework which takes into account economic,demographic,institutional and technical factors.The following independent variables are selected:GDP per capita,trade openness,population density,tertiary education enrollment,ICT related law,mobile cellular penetration and ICT infrastructure.The regression results suggest that GDP per capita,tertiary enrollment rates,ICT related law,mobile cellular penetration and ICT infrastructure have significant positive influence on mobile Internet penetration.The impact of trade openness on mobile Internet penetration,however,is not significant.Meanwhile,population density is negatively correlated with mobile Internet penetration.The thesis provides explanations based on the regression results.It is concluded that GDP per capita reflects an individual's capability to afford mobile Internet services as well as country-specific capability of investing in ICT infrastructure.Tertiary enrollment rates reflect English literacy as well as the ability of users to use mobile Internet effectively.ICT related law creates a "safe heaven" for innovation and the protection of IPR,and hence affects mobile Internet penetration.Mobile phones,as the medium for users to access the Internet,also have a positive influence on mobile Internet diffusion.ICT infrastructure is the precondition for mobile Internet to develop and thus has direct positive effects on its adoption and diffusion.Trade openness shows limited impact on mobile Internet penetration,probably due to the implementation lag between the initial exposure to high-tech products and the final adoption of advanced technology.Population density is negatively correlated with mobile Internet penetration,which is likely because the market size effect cannot adequately be utilized to address penetration levels within the sample countries.The interpretation of results lays the foundation for further policy recommendations.First of all,governments should facilitate structural reforms and innovation to boost economic growth.Specifically,it is imperative to carry out supply-side reforms and accelerate industrial upgrading of the manufacturing sector.Secondly,governments should introduce a variety of student grant and loan programs and help universities upgrade their facilities to make university education cheaper yet more attractive to young students.In addition,governments should work to improve ICT related laws.For developing countries,strengthening ICT legislation is the priority.For developed countries,it is necessary to consolidate ICT law enforcement and introduce an effective penalty mechanism.Furthermore,governments ought to make sure that domestic and foreign mobile phone manufacturers can compete on fair grounds and encourage intra-industry competition in the domestic telecommunications industry.This will make consumers more willing to purchase mobile phones and relevant services.Last but not least,governments must make efforts to invest more in ICT infrastructure and provide tax incentives to bring in more non-governmental investment to drive innovation in ICT infrastructure development.