The Estimation of the Effects of Economic Variables on the Development of Information Technology in Developing Countries

This study investigates the effect of economic variables on development of IT in DCs. The results of estimating the econometric model using pooling data method (37 developing countries during 1998-2002) with the assumption of Common Intercept and with Cross Section Weights of data, show that development of IT in developing countries is a function of four demand-side determinants:1- By increasing per capita GDP, more financial resources are released from essential needs and the possibility of investment in IT infrastructure and the demand for IT goods will be increased.2- New technologies can be transmitted via channels such as imports and exports. Therefore the greater imports and exports of goods and services in a country (that is, the greater openness to the foreign trade) represent the more diffusion of IT.3- The expansion of service sector is effective in IT adoption, because Information Technology is most applicable in service sector, especially in an Information-based service sector. 4- Educated people (human capital) are important in at least two ways. First, that educated people have comparative advantage in learning and implementing new technologies and second, that they can raise demand for digital production.