Factors affecting broadband penetration in OECD countries: a panel data analysis

Factors affecting broadband penetration in OECD countries: a panel data analysis

Internet diffusion is transforming the economic, social and cultural lives in affluent societies such as OECD countries. Although a variety of strategies have been adopted in these countries to enhance broadband internet access, there still exist substantial differences in broadband access and its usage. This study empirically investigates factors that contribute towards broadband penetration across OECD countries using panel data spanning a period from 1997 to 2009. Pooled OLS (POLS) method is employed to analyze data imposing restrictions on the intercept and slope of the regression function. Results indicate that traditional socioeconomic indicators such as income, tertiary education and size of labor force have significant positive effects on broadband penetration. Surprisingly the effect of secondary education on broadband access is found negative. Findings of positive relationship between other variables, recognizes the presence of digital divide in the region. Future studies focusing more on the digital divide issues are expected to receive more attention from the policy makers of the governments of these countries.