# A Statistical Analysis of Industrial Penetration and Internet Intensity in Taiwan +
## 6 Conclusions  
The paper is the first to investigate the issue of Industrial Penetration and Internet Intensity, which is based on manufacturing industry data that cover 26 two-digit industries. This paper used Taiwanese manufacturing industry census data that was compiled by the Directorate-General of Budget, Accounting and Statistics of the Executive Yuan for the year 2006 to examine the factors influencing the extent to which manufacturers use the internet. When we considered the total expenditure on the internet for purchase and sales products, an actual figure was observed only if the firm used the internet, thereby causing the problem of sample selection bias. In order to correct the problem of sample selection bias, the paper used the Heckman sample selection model and two-stage estimation procedure to obtain consistent estimates of the parameters of the sample selection model. In order to improve the efficiency in estimation, we used the bootstrapping approach to estimate the sample variance. The empirical results showed that, regardless of whether we used the bootstrapping approach, the Mill's lambda test statistic rejected the null hypothesis that \(\beta_{\lambda}\) equals zero at the 1% level of significance for the aggregated full industry, and 7 of 26 industries rejected the null hypothesis that \(\beta_{\lambda}\) equals zero at the 10% level of significance, indicating that the problem of sample selection bias needed to be corrected. The main points arising from the paper, which are summarized in Table 10, are as follows:  
1. The manufacturer's decision to use the internet is influenced by five factors, namely the degree of industrial concentration, export intensity, geographical location, the manufacturer's size of operations, and the independence of operations. As Taiwan largely consists of manufacturers with independent operations, it is not surprising that the likelihood of such manufacturers using the internet is relatively high, with the manufacturers' independence of operations having the greatest impact. The second most influential factor is the manufacturers' export intensity, indicating that the more manufacturers rely on exports, the greater their export intensity, and the more that they need to use the internet to communicate with overseas customers. The third most influential factor is the degree of industrial concentration. The greater is the competition that manufacturers face, in order to increase their ability to compete with other manufacturers, the more likely that they be inclined to use the internet. The empirical results also show that manufacturers that are located in rural areas would be likely to use the internet for business than those that are located in urban areas, and larger firms would be more likely to use the internet for business than smaller firms. However, the impact of the degree of industrial penetration on the manufacturers' use of the internet is not significant. 2. The degree to which manufacturers use the internet is primarily influenced by three factors, namely the degree of industrial penetration, geographical location, and the contagion effect. While the impact of the degree of industrial penetration on the manufacturers' use of the internet is not significant, the effect on the extent to which manufacturers use the internet is significant and negative. This suggests that the extent of industrial penetration does not affect whether or not manufacturers will use the internet, but it will affect the extent to which manufacturers that already use the internet will continue to use the internet. The results suggest there exists a substitute relationship between the penetration of localization and the extent to which manufacturers use the internet, indicating that internet technology has overcome the \"distance\" factor, so that it is no longer especially important. 3.