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Financial Development, the Structure of Capital Markets, and the Global Digital Divide
Author:
Charles Amo Yartey
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Series:
IMF Working Papers
Volume/Issue:
Volume 2006: Issue 258
Language:
English
Publication Date:
01 Nov 2006
DOI:
https://doi.org/10.5089/9781451865189.001
ISBN:
9781451865189
ISSN:
1018-5941
Pages:
28
Keywords:
WP; dependent variable; ICT development; ICT diffusion; panel ICT model
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper examines the role of financial development and financial structure in explaining cross-country diffusion of information communication technology (ICT). Using panel data for 76 emerging and advanced countries for the period 1990-2003, the paper finds that credit and stock market development tends to foster ICT development. Financial structure, however, does not appear to have any significant relationship with ICT development. The conclusions of the paper highlight the role of financial development in the market for knowledge-based products, and are consistent with theoretical predictions. The finding that financial development is an important determinant of ICT development implies that countries with underdeveloped financial markets may continue to lag behind in the use of ICT.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund