Mobile Internet and Income Improvement: Evidence from Viet Nam

New developments of existing technologies over time have led to emergent patterns of technology adoption and, accordingly, changed impacts on the economy and society. Focusing on the arrival of mobile internet, this paper identifies significant positive effects of mobile internet on provincial average household income in Viet Nam. The results are identified using a combination of panel fixed effects and instrumental variable approaches. Evidence of impact mechanisms via average household income from wages, firm sizes and employees’ wages, and transportation flows and distances is also presented. Heterogeneity analysis suggests that the effect sizes are larger for lower-income quintiles and for rural areas, highlighting the more inclusive impact of the innovation over the last decade. The outcomes from Viet Nam, a lower-middle-income country, can bring further understanding about the extent of the impacts of second-generation mobile for development in particular and information and communication technologies for development in general.