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This study investigates the effect of economic variables on development of IT in DCs. The results of estimating the econometric model using pooling data method (37 developing countries during 1998-2002) with the assumption of Common Intercept and with Cross Section Weights of data, show that development of IT in developing countries is a function of four demand-side determinants:
1- By increasing per capita GDP, more financial resources are released from essential needs and the possibility of investment in IT infrastructure and the demand for IT goods will be increased.
2- New technologies can be transmitted via channels such as imports and exports. Therefore the greater imports and exports of goods and services in a country (that is, the greater openness to the foreign trade) represent the more diffusion ofIT.
3- The expansion of service sector is effective in IT adoption, because Information Technology is most applicable in service sector, especially in an Information-based service sector.
4- Educated people (human capital) are important in at least two ways. First; that educated people have comparative advantage in learning and implementing new
technologies and second, that they can raise demand for digital production.
JEL Classification: D80.