The ICT Diffusion : A Spatial Econometric Approach

Several empirical studies highlight severe disparities among geographical areas in the diffusion of ICT that affect not only developed vs. developing countries (Global Digital Divide) but also regions within the same country (Local Digital Divide). Economic scholars have investigated the determinants of these disparities but comprehensive conclusions are far to be reached. This paper contributes to the literature by modelling the level of ICT diffusion at the Italian regional level (NUT3) using spatial econometric techniques. Namely, two main research questions are addressed: (i) do Italian regions exhibit significant differences in their patterns of ICT diffusion? (ii) if so, how local structural specificities interact with spatial effects in explaining these disparities? According to recent approaches in the metrics of ICT, the empirical analysis uses domain name registrations by firms in 2001 as a proxy of ICT diffusion at the local level. The results show that sectoral composition, technological endowment and absorptive capacity at the regional level, as well as firms' characteristics, do play a crucial role. In addition, pure spatial effects contribute to regional disparities