In the academic realm, the term digital divide which typically relates to the gap between those who have and do not have access to information and communication technologies (ICTs), has been an attractive subject on the scholarly and political agenda. The problem however is that the topic is highly fragmented in academic literature, and many of the research findings are inconsistent and contradictory. In addition, too much of the research effort has gone into the ‘niceties’ of measuring the divide and too little has been devoted to establishing a consistent analytical framework. In information systems and development terms, there have been few attempts to critically pinpoint the socio-economic impact of ICT innovation in developing nations and its relation with bridging the digital divide. The goal of this literature review accordingly, is to demonstrate how theoretical perspectives regarding ICT innovation can strengthen digital divide research within the broader socio-economic context of developing nations. The paper simultaneously calls for more extensive empirical studies backed by theory and valid operational frameworks.