Government Supports and Technology Adoption: Evidence From Tunisia

This study investigates the effect of Industrial Upgrading and Modernization Program (IUMP) on the information and communication technology (ICT) adoption in Tunisia. Based on the Industrial Upgrading Survey 2016, we use the matching estimators to estimate the effect of subsidies, granted in the framework of IUMP, on the adoption of three groups of ICT (Software, Hardware and Network communications). Our results show that although the IUMP has a positive impact on the intensity of ICT adoption, the level of adoption remained under that the transition to knowledge economy requires. We also find that investment incentive has reduced the digital gap between developed and backward regions in the adoption of Software and Network communications, by contrast to the case of Hardware, for which the gap has increased.