Investigating the causal relationship between digital divide and Income Divide in Iran's Provinces

The main purpose of this paper is to investigate the causality of digital divide and income gap between Iranian provinces, in other words, whether the digital divide (inequality in the access and use of ICT) causes an income gap (an increase in income inequality), or, in contrast, the income gap causes Digital divide Or that there is an answer between them. For this purpose, Gini coefficient index is used as the income gap and the indicator of ICT for the digital divide. The Granger causality test for panel data examines the long-run and short-run relationship between digital divide and income gap in different provinces of the country during the 2010-2015 period. Estimation of long-run coefficients using have done by using Fully Modified Ordinary Least Square (FMOLS) method and estimation of short-run coefficients and causality relationships using Generalized method of moment (GMM). The results of this study show, firstly, that there is a bilateral causality between the digital divide and the income gap in the short and long term in the entire Iranian provinces. Secondly, the advancement of ICT (reducing digital divide) has reduced inequality of income (reducing the income gap) Becomes Increasing the income gap also hinders the advancement of information and communication technology (increasing the digital divide)