Wider Gaps in a Flatter World? The Speed of New Product Diffusion in Rich versus Poor Countries

The idea of a flattening world has captured the public imagination, yet the income gap between rich and poor countries has widened. The net effect of these two trends on the speed of new product diffusion across the world has remained an open question. This study provides an answer by analyzing 848 diffusion trajectories of 15 consumer durables in 86 countries between 1977 and 2010 and distinguishing between early and late speed of diffusion. There are four main findings: (i) the speeds at which 10% and 50% penetration are reached have both increased in rich and poor countries, (ii) there is no clear convergence or divergence in the speed to reach 10% penetration, (iii) there is divergence in the speed to reach 50% penetration, and (iv) the divergence in diffusion speed is consistent with divergence in income. Hence, in spite of diffusion acceleration and economic globalization, the gap in diffusion speed between rich and poor countries is wider than 30 years ago, at least for the median household rather than the fastest adopters