# A Statistical Analysis of Industrial Penetration and Internet Intensity in Taiwan +
## 5 Results and Discussion
### Regression Model with Sample Selection Correction for All Industries
For the \(export_{i}\) variable, the marginal effect is (0.2708, 0.2963) for columns 2 and 3 in Table 7. For example, the figure 0.2708 means that, when the export intensity is increased by 1, the marginal effect as to how manufacturers use the internet will increase by 0.2708%. For the \(GHHI_{j}\) variable, the marginal effects are (\(-0.0245\), \(-0.0133\)) for columns 2 and 3, respectively, in Table 7. For example, when industrial penetration is reduced by 1, the degree to which manufacturers use the internet will increase by 0.0245%. Therefore, a substitute relationship exists between the degree to which manufacturers use the internet and the level of industrial penetration, an empirical result that accords with the results obtained in (17) [PERSON] and [PERSON] (2007), who used US information technology-related manufacturing and service industry data, and (18) [PERSON] and [PERSON] (2008), who used French manufacturing data. The result confirms that the popularity of the internet is such that the distance factor is no longer especially important, that is, the internet has overcome the problem of distance between manufacturers. It is worth noting that for the dummy variable, \(city_{i}\), the marginal effects are (\(-0.0051\), \(-0.0062\)) for columns 2 and 3, respectively, in Table 7. For example, manufacturers that are located in urban areas will use the internet less by \(-0.0051\%\) compared with those that are located in rural areas. In other words, manufacturers that are located in rural areas will use the internet to a greater extent than those that are located in urban areas. These results confirm the empirical finding in [PERSON] et al. (2005) and [PERSON] (1999) that a complementary relationship exists between internet intensity and the degree of urbanization. We now present the results in column 3 of Tables 5 and 6 that show the probit estimates, as given by Equation (9), which estimate the factors that determine whether manufacturers will use the internet for their business purposes. The empirical results show that, regardless of whether \(HHI\) or \(CR4\) is used as the proxy variable for the degree of industrial concentration, the coefficients of \(HHI_{j}\) and \(CR4_{j}\) are negative and significant at the 1% level of significance in column 3 of Tables 5 and 6. These results indicate that the greater is the competition that manufacturers face, in order to increase their ability to compete with other manufacturers, the more likely they will be inclined to use the internet for their business purposes. \begin{table}
\begin{tabular}{c c c} \hline \hline
**Variables** & **Internet Intensity (1)** & **Internet Intensity (2)** \\ \hline \(GHH_{j}\) & \(-0.0243\) & \(-0.0133\) \\ \(HHI_{j}\) & \(-0.0897\) & \\ \(CR4_{j}\) & & \(-0.0069\) \\ \(export_{i}\) & 0.2643 & 0.2908 \\ \(city_{i}\) & \(-0.0049\) & \(-0.0060\) \\ \(size_{i}\) & 0.0002 & 0.0003 \\ \(computer1_{i}\) & 0.0024 & 0.0024 \\ \(computer2_{i}\) & 0.0007 & 0.0007 \\ \hline \hline \end{tabular}
\end{table} 
Table 7: Marginal effect of internet intensity (unit: %). Export intensity is also an important factor for affecting the manufacturers' use of the internet. The coefficients of \(export_{i}\) are positive and significant at the 1% level of significance in column 3 of Tables 5 and 6. This is not surprising as, the greater will manufacturers rely on exports, the greater will be their export intensity, and the greater will be the use of the internet to communicate with their overseas customers. The coefficient of geographical location of \(city_{i}\) in column 3 of Tables 5 and 6 shows a negative and significant effect on manufacturers' use of the internet for their business purposes. This empirical result suggests that manufacturers that are located in rural areas will be more likely to use the internet for business than those located in urban areas.