Journal of International Information Management


Due to various economic, political and social reasons, the Internet usage remains relatively Iom> in many countries around the world. The difference in access to new information technologies and the Internet among countries, is known as the "digital divide." This is a significant economic phenomenon that warrants the attention of analysts and policy makers. Furthermore, since information technologies and the Internet have proven to be key drivers for economic growth and global trade, many nations are in danger of being marginalized. This paper examines the relationship between economic freedom as indicated by the Economic Freedom Index (EFI), proposed by Beach and O'Driscoll (2003) and the digital divide. By analyzing data from sixty-two countries that include variables such as the cost of Internet access, number of personal computers and phones, personal income level, and innovation capability, it is shown that EFI is significantly related to the diffusion rate of the Internet. Therefore, countries need to examine and implement economic policies that are conducive to narrowing the digital gap.