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Has the Internet Increased Trade? Developed and Developing Country Evidence

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  • George R. G. Clarke
  • Scott J. Wallsten

Abstract

Developing countries export more to developed, but not other developing countries, when Internet penetration is higher. Although this could be because Internet penetration stimulates exports, it could also be because trade openness encourages Internet use. To test the direction of causation, we allow Internet use to be determined endogenously using countries' regulation of data services as an instrument. The results suggest that access to the Internet does improve export performance in developing countries, although not in developed countries. In other words, improving Internet access in a developing country will stimulate exports from that country to rich countries. (JEL F15) Copyright 2006, Oxford University Press.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 44 (2006)
Issue (Month): 3 (July)
Pages: 465-484

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Handle: RePEc:oup:ecinqu:v:44:y:2006:i:3:p:465-484

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Cited by:
  1. Huub Meijers, 2014. "Does the internet generate economic growth, international trade, or both?," International Economics and Economic Policy, Springer, vol. 11(1), pages 137-163, February.
  2. Hiranya K. Nath & Uday M. Apte, 2012. "U.S. Trade in Information-Intensive Services," Working Papers 1202, Sam Houston State University, Department of Economics and International Business.
  3. Jonathan Timmis, . "The Internet and International Trade in Goods," Discussion Papers 12/03, University of Nottingham, School of Economics.
  4. Jonathan Timmis, . "The Internet and International Trade in Goods," Discussion Papers 12/08, University of Nottingham, GEP.
  5. Yoshino, Yutaka, 2008. "Domestic constraints, firm characteristics, and geographical diversification of firm-level manufacturing exports in Africa," Policy Research Working Paper Series 4575, The World Bank.
  6. Jonathan Timmis, 2013. "Internet Adoption and Firm Exports in Developing Economies," Discussion Papers 2013-05, University of Nottingham, GEP.
  7. Clarke, George R.G., 2008. "Has the internet increased exports for firms from low and middle-income countries," Information Economics and Policy, Elsevier, vol. 20(1), pages 16-37, March.

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