The purpose of this study is to investigate the effects of Information and Communication Technology (ICT) development on technology diffusion and firm’s capacity to absorb new technologies. The study analyses the relationship between ICT development measured by mobile broadband subscriptions, broadband internet, percentage of internet users and mobile-cellular telephone subscriptions on one hand and firm-level technology absorption on the other by examining the mediating role played by Information Technology (IT) usage by businesses and governments. A quantitative approach based on Partial Least Squares (PLS) Structural Equation Modelling (SEM) is employed to analyse country-level data across 134 countries for the year 2016 from both developing and developed countries. Analysis of the results presents evidence of ICT development having a significant role in shaping technology absorption by firms and that this direct relationship is also positively mediated by IT usage. The study provides implications for research, practice, and policy.