Innovation and Economic Development

Innovation and Economic Development

The Impact of Information and Communication Technologies in Latin America

Edited by Mario Cimoli, André A. Hofman and Nanno Mulder

Information and communication technologies (ICT) are spreading fast across Latin America and the Caribbean. This trend has brought about important economic and social changes, which have largely gone unmeasured until recently. Here, analysts from the United Nations Economic Commission for Latin America and the Caribbean along with other distinguished scholars in the field of ICT, growth and productivity provide theoretical and empirical insights to the debate on the role of ICT in economic development.

Chapter 10: The Relative Impact of the Regulatory Framework on the Diffusion of ICT: Evidence from Latin America, 1989–2004

Nauro F. Campos

Subjects: development studies, development studies, economics and finance, economics of innovation, innovation and technology, economics of innovation, technology and ict


Nauro F. Campos* 1 INTRODUCTION The diffusion of information and communication technologies (ICT) has recently received a great deal of attention. Many believe that this generalpurpose technology has potential comparable with those that underpinned the Industrial Revolution of the middle of the nineteenth century. Indeed, fixed and mobile phones, personal computers and the Internet have diffused rapidly in the past ten or 15 years with massive (and still imperfectly understood) productivity, growth and welfare implications. One argument is that privatization and de-regulation have played a major role in this process although, to date, there have few efforts to assess their relative importance. This paper contributes to this analysis. We provide a comprehensive assessment of the determinants of ICT diffusion in Latin America and the Caribbean (LAC). We study the diffusion processes of four types of ICT (fixed and mobile phones, personal computers and the Internet) and examine a comprehensive set of potential determinants (i.e., economic, political, technological and the institutional and regulatory framework dimensions) using a unique yearly panel dataset of 35 Latin American and Caribbean economies between 1989 and 2004. We tackle questions such as how fast have ICT diffused in this region? What are the main determinants of this process? Further, there is a widely held view by international organizations (IMF, 2001; OECD, 2004; World Bank, 2006;) that changes that occurred in the institutional and regulatory framework (IRF) in the early 1990s have played a major role in this process. Have they? Our OLS fixed effects estimates support...

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