What Are the Drivers of ICT Diffusion? Evidence from Latin American Firms

Abstract

It is generally recognized that information and communication technologies (ICTs) have radically changed how modern business is conducted, benefiting firm performances through several channels such as increasing the efficiency of internal processes, expanding market reach, or increasing innovation. However, most related literature refers to developed countries, and evidence for Latin America and the Caribbean (LAC) is scarce and fragmented. Our article contributes to filling this gap by identifying the drivers of ICT diffusion in LAC firms. We find evidence of the presence of both epidemic and rank effects, where larger, older, skill-intensive, and exporter and urban firms are more likely to adopt ICTs. However, once adopted, size and location lose importance. The availability of novel empirical evidence specific to the LAC region offers useful insights to policymakers for the design and implementation of initiatives aimed at fostering productivity by increasing ICT adoption and intensive use.