Advertisement

Information Systems Frontiers

, Volume 17, Issue 5, pp 1097–1110 | Cite as

Does better Internet access lead to more adoption? A new empirical study using household relocation

  • Junzhao Ma
  • Qingyi Huang
Article

Abstract

In the past decade, governments around the world have made significant investments to improve Internet access in underserved areas. Yet there is scant evidence on how effective these measures are at increasing Internet adoption and narrowing the digital divide. In this paper, we empirically investigate the effect of the supply of Internet access on Internet adoption. The main empirical challenge is the issue of endogeneity, as Internet service providers (ISPs) selectively enter markets based on local demand characteristics. We propose a novel solution to this problem using a panel dataset of households that relocate to different Internet access supply conditions. We find that the supply of Internet access has little effect on Internet adoption: underserved markets—those with fewer than 4 ISPs—exhibit levels of adoption comparable to well-served markets with plenty of service providers. Our findings suggest that the highly touted government initiatives to boost Internet access in underserved areas are likely to have limited impact on adoption rate in those regions.

Keywords

ICT adoption Digital divide Endogeneity Natural experiment Specification testing 

References

  1. Allison, P. D. (1982). Discrete-time methods for the analysis of event histories. Sociological Methodology, 13, 61–98.CrossRefGoogle Scholar
  2. Angrist, J. D., & Pischke, J.-S. (2008). Mostly harmless econometrics: An empiricist’s companion. Princeton: Princeton University Press.Google Scholar
  3. Ansari, A., Mela, C. F., & Neslin, S. A. (2008). Customer channel migration. Journal of Marketing Research, 45, 60–76.CrossRefGoogle Scholar
  4. Aron, D. J., & Burnstein, D. E. (2003). Broadband adoption in the United States: An empirical analysis. Working paper, retrieved on June 26th, 2011 from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=386100.
  5. Billon, M., Marco, R., & Lera-Lopez, F. (2009). Disparities in ICT adoption: a multidimensional approach to study the cross-country digital divide. Telecommunications Policy, 33, 596–610.CrossRefGoogle Scholar
  6. Bresnahan, T. F., & Reiss, P. C. (1991). Entry and competition in concentrated markets. The Journal of Political Economy, 99(5), 977–1009.CrossRefGoogle Scholar
  7. Brown, S. (2008). Household technology adoption, use, and impacts: past, present, and future. Information Systems Frontiers, 10(4), 397–402.CrossRefGoogle Scholar
  8. Brown, S., & Venkatesh, V. (2003). Bringing non-adopters along: the challenge facing the PC industry. Communications of the ACM, 46(4), 76–80.CrossRefGoogle Scholar
  9. Choudrie, J., & Papazafeiropoulou, A. (2007). Assessing the UK policies for broadband adoption. Information Systems Frontiers, 9(1), 297–308.CrossRefGoogle Scholar
  10. Dewey, C. (2013). The 60 million Americans who don’t use the Internet, in six charts. Washington Post (blog), retrieved on December 8th, 2013 from http://www.washingtonpost.com/blogs/the-switch/wp/2013/08/19/the-60-million-americans-who-dont-use-the-internet-in-six-charts/.
  11. Downes, T., & Greenstein, S. (2002). Universal access and local internet markets in the US. Research Policy, 31(7), 1035–1052.CrossRefGoogle Scholar
  12. Dwivedi, Y. K., Papazafeiropoulou, A., Brinkman, W.-P., & Lal, B. (2010). Examining the influence of service quality and secondary influence on the behavioural intention to change internet service provider. Information Systems Frontiers, 12(2), 207–217.CrossRefGoogle Scholar
  13. Goldfarb, A., & Prince, J. (2008). Internet adoption and usage patterns are different: implications for the digital divide. Information Economics and Policy, 20(1), 2–15.CrossRefGoogle Scholar
  14. Greenstein, S. (2000). The commercialization of information infrastructure as technological mediation: the internet access market. Information Systems Frontiers, 1(4), 329–348.CrossRefGoogle Scholar
  15. Huang, Q., Nijs, V. R., Hansen, K., & Anderson, E. T. (2012). Wal-Mart’s impact on supplier profits. Journal of Marketing Research, 49(2), 131–143.CrossRefGoogle Scholar
  16. ITU & UNCTAD. (2007). World information society report 2007: Beyond WSIS. Retrieved on August 28th, 2013 from http://www.itu.int/osg/spu/publications/worldinformationsociety/2007/index.html.
  17. Mcloone, S. (2009). Stimulus billions fund rural broadband Internet. CNN.COM, retrieved on June 26th, 2011 from http://money.cnn.com/2009/08/11/smallbusiness/stimulus_billions_for_rural_broadband.smb/.
  18. National Telecommunications and Information Administration. (1995). Falling through the net: a survey of the “have nots” in Rural and Urban America. Retrieved on June 26th, 2011 from http://www.ntia.doc.gov/ntiahome/fallingthru.html.
  19. National Telecommunications and Information Administration. (1998). Falling through the net II: new data on the digital divide. Retrieved on June 26th, 2011 from http://www.ntia.doc.gov/ntiahome/net2/falling.html.
  20. National Telecommunications and Information Administration. (1999). Falling through the net: defining the digital divide. Retrieved on June 6th, 2013 from http://www.ntia.doc.gov/legacy/ntiahome/fttn99/contents.html.
  21. National Telecommunications and Information Administration. (2000). Falling through the net: toward digital inclusion: a report on Americans’ access to technology tools. Retrieved on August 28th, 2013 from http://www.ntia.doc.gov/legacy/ntiahome/fttn00/falling.htm.
  22. Pew Internet & American Life Project. (2000). Who’s not online: 57% of those without Internet access say they do not plan to log on. Retrieved on June 26th, 2011 from http://www.pewinternet.org/Reports/2000/Whos-Not-Online.aspx.
  23. Pew Internet & American Life Project. (2003a). The ever-shifting internet population: a new look at Internet access and the digital divide. Retrieved on June 26th, 2011 from http://www.pewinternet.org/Reports/2003/The-EverShifting-Internet-Population-A-new-look-at-Internet-access-and-the-digital-divide.aspx.
  24. Pew Internet & American Life Project. (2003b). Broadband Adoption at Home. Retrieved on June 26th, 2011 from http://www.pewinternet.org/Reports/2003/Broadband-Adoption-at-Home.aspx.
  25. Pew Internet & American Life Project. (2003c). Internet use by region in the US. Retrieved on June 26th, 2011 from http://www.pewinternet.org/Reports/2003/Internet-Use-by-Region-in-the-US.aspx.
  26. Pew Internet & American Life Project. (2003d). America’s online pursuits. Retrieved on June 26th, 2011 from http://www.pewinternet.org/Reports/2003/Americas-Online-Pursuits.aspx.
  27. Pew Internet & American Life Project. (2004). Rural areas and the Internet. Retrieved on June 26th, 2011 from http://www.pewinternet.org/Reports/2004/Rural-Areas-and-the-Internet.aspx.
  28. Pew Internet & American Life Project. (2005). Digital Divisions. Retrieved on June 26th, 2011 from http://www.pewinternet.org/Reports/2005/Digital-Divisions.aspx.
  29. Pew Internet & American Life Project. (2007). Closing the broadband divide. Retrieved on June 26th, 2011 from http://www.pewinternet.org/Reports/2007/Closing-the-Broadband-Divide.aspx.
  30. Prieger, J. E. (2003). The supply side of the digital divide: is there equal availability in the broadband internet access market? Economic Inquiry. Oxford University Press, 41(2).Google Scholar
  31. Seshagiri, N. (1999). The informatics policy in India. Information Systems Frontiers, 1(1), 107–116.CrossRefGoogle Scholar
  32. Severson, K. (2011). Digital age is slow to arrive in rural America. New York Times, February 17th, 2011. Retrieved on December 6th, 2013 from http://www.nytimes.com/2011/02/18/us/18broadband.html?pagewanted=all.
  33. Shin, Y. M., Lee, S. C., Bongsik Shin, B., & Lee, H. G. (2010). Examining influencing factors of post-adoption usage of mobile internet: focus on the user perception of supplier-side attributes. Information Systems Frontiers, 12(5), 595–606.CrossRefGoogle Scholar
  34. The Organization for Economic Co-operation and Development (OECD). (2011). National Broadband Plans. OECD Digital Economy Papers, No. 191, OECD Publishing.Google Scholar
  35. The Organization for Economic Co-operation and Development (OECD). (2013). OECD Key ICT Indicators. Retrieved on June 6th, 2013 from http://www.oecd.org/internet/broadband/oecdkeyictindicators.htm.
  36. US Government Accountability Office (GAO). (2006). Telecommunications: broadband deployment is extensive throughout the United States, but it is difficult to assess the extent of deployment gaps in rural areas.Google Scholar
  37. Venkatesh, V., & Brown, S. (2001). A longitudinal investigation of personal computers in homes: adoption determinants and emerging challenges. MIS Quarterly, 25(1), 71–102.CrossRefGoogle Scholar
  38. Wooldridge, J. M. (2002). Econometric analysis of cross section and panel data. Cambridge: MIT Press.Google Scholar
  39. World Bank. (2009). Information and communications for development 2009: Extending reach and increasing impact., chapter 3, “Economic Impacts of Broadband,” retrieved on June 6th, 2013 from http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTINFORMATIONANDCOMMUNICATIONANDTECHNOLOGIES/EXTIC4D/0,,contentMDK:22229759~menuPK:5870649~pagePK:64168445~piPK:64168309~theSitePK:5870636,00.html.
  40. World Bank. (2010). Building broadband: Strategies and policies for the developing world. Retrieved on June 6th, 2013 from http://siteresources.worldbank.org/EXTINFORMATIONANDCOMMUNICATIONANDTECHNOLOGIES/Resources/282822-1208273252769/Building_broadband.pdf.
  41. Wyatt, E. (2013a). Waste is seen in program to give Internet access to rural U.S. New York Times, February 12th, 2013, retrieved on June 6th, 2013 from http://www.nytimes.com/2013/02/12/technology/waste-is-seen-in-program-to-give-internet-access-to-rural-us.html?pagewanted=all.
  42. Wyatt, E. (2013b). Most of U.S. is wired, but millions aren’t plugged in. New York Times, August 18th, 2013, retrieved on December 6th, 2013 from http://www.nytimes.com/2013/08/19/technology/a-push-to-connect-millions-who-live-offline-to-the-internet.html?pagewanted=1&_r=0.
  43. Zhang, X., & Maruping, L. M. (2008). Household technology adoption in a global marketplace: incorporating the role of espoused cultural values. Information Systems Frontiers, 10(4), 403–413.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.Faculty of Business and EconomicsMonash UniversityCaulfield EastAustralia
  2. 2.Guanghua School of ManagementPeking UniversityBeijingChina

Personalised recommendations