The Influence of Internet Penetration on Poverty and Income Inequality

Abstract

Increased usage of technology is linked with poverty reduction, in existing literature but also rising income inequality due to microeconomic factors. This paper attempts to investigate how the technological penetration has impacted poverty levels and income inequality, at the global level and across different levels of income. Using data for 86 countries between 2005 and 2020, the paper employs a robust two step Systematic Generalized Moment Method (Sys-GMM) to assess the linear effect, non-linear effect, and synergy effect models. The results indicate that technological penetration has a different impact across countries, depending on the income levels. The positive association between technology and income inequality has repercussions for low-income countries, in particular. From a policy perspective, it is essential to consider macro- and micro-economic factors that affect the impact of technology penetration in low-income countries.

Navigating the Digital Divide: The Dual Impact of Technology on Business Management and Financial Outcomes

“…Providing Internet services will empower the common man to generate income online. (Afzal et al, 2022) Information and communication have always opened up opportunities for the poor to generate income, reduce isolation and flexibly respond to emergencies. As the use of mobile phones explodes in developing countries, even marginalized communities are now benefiting from modern means of communication.…”

Yükselen Sanayi Ekonomilerinde Dijitalleşme ve Küreselleşmenin Gelir Dağılımı Üzerindeki Etkisi

“…Consequently, the strategic measures pursued in digitalization catalyse promoting innovative practices and, in the long run, play a pivotal role in fostering sustainable economic growth. Concurrently, the expansion of the ICTs can serve as a mitigating factor in alleviating income inequality within the economy (Afzal et al, 2022). Similarly, Chipeva et al (2018) emphasize that investing in ICTs yields substantial economic benefits, enhances productivity, lowers costs, promotes innovation, and facilitates trade.…”

Internet Marketing

“…With today's Internet penetration [9,10], every company having a website is almost a matter of course. The quality of these sites often lags the average, but their very existence speaks to the purchasing power of the Internet.…”