article · Digital Policy Regulation and Governance
Examining data from fifteen emerging market economies across Africa, Asia, Europe, and Latin America between 2000 and 2019 reveals how digital infrastructure and trade openness influence technological progress. Both fixed and mobile broadband penetration significantly accelerate technological catch-up. These connectivity channels improve the capacity of developing economies to absorb, decode, and utilise foreign technologies, effectively speeding up technological transfer. However, trade openness influences these broadband types differently. While higher trade openness significantly enhances the positive impact of fixed broadband on technological catch-up, it does not moderate the effects of mobile broadband. Consequently, combining international trade liberalisation with fixed broadband rollout offers a potent mechanism for closing technological gaps, whereas mobile broadband supports technological adoption independently of national trade openness levels.
Policymakers and development agencies must coordinate digital connectivity investments with international trade policies. While mobile internet expands technology transfer independently of trade conditions, capturing the full benefits of fixed broadband requires open trading environments. Understanding these distinct mechanisms enables emerging markets to deploy infrastructure investments strategically to accelerate productivity gains and absorb foreign technological advancements more effectively.
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Purpose This study aims to explore how trade openness moderates the effects of fixed and mobile broadband penetration on technological catch-up of emerging market economies. Design/methodology/approach The study used data from three sources: Penn World Table, World Bank World Development Indicators and International Telecommunication Union databases for the period between 2000 and 2019. The empirical evidence is based on feasible generalized least squares, panel-corrected standard errors and bias-corrected dynamic regression. Findings The main findings are as follows. First, both fixed and mobile broadband penetrations play significant roles in enhancing the process of technological catch-up among the countries. They speed up the process of technological transfer and improve the absorption capacity of the countries to transfer, decode and appropriately apply foreign technology in their countries. Second, trade openness is found to significantly moderate the effect of fixed broadband penetration, but it does not moderate the effect of the mobile one. Research limitations/implications The major research limitation is that findings are based on 15 emerging economies, which can limit generalizability. Total factor productivity growth measures efficiency improvements but no other aspects of technological progress, such as innovation in products or processes. Data discrepancy between fixed and mobile broadband limits results’ comparability between the broadband types. Practical implications The implications of the findings relate to the fact that governments should invest in broadband infrastructure to ensure fast, affordable and competitive internet access across all sectors and regions. Trade liberalization should be prioritized to enhance the benefits of globalization and support technological catch-up. Originality/value This study adds to the literature by providing fresh insight into the role of openness in moderating the effect of broadband penetration on technological catch-up, using panel data for emerging countries drawn from Asia, Europe, Latin America and Africa.
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DOI: 10.1108/dprg-09-2024-0220
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