Internet Penetration As National Innovation Capacity: Worldwide Evidence on the Impact of ICTs on Innovation Development

Information and communication technologies (ICTs) and innovations have profoundly reshaped global development. Although there are many works that have examined the direct effects of ICTs on national development in fields of economics, society and politics, the important role played by ICTs in national innovation capacity has been less widely explored from an empirical standpoint. This paper investigates the influence of Internet penetration on national innovation development, using cross-national panel data of 156 countries from 1995 to 2014. We find that Internet penetration has a significant but decreasing innovation-promotion effect, and this finding stood the test of various models and variable measures. Further study shows that there is a one-period lagged effect of Internet penetration on innovation, and political regimes moderate the innovation promotion effect of ICTs.