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The Impact of the Internet on Retail Competition: Evidence from Technological Differences in Internet Access

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  • Gebhardt, Georg
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    Abstract

    Does the internet increase competition? To address this question, I exploit two institutional details unique to Germany: (1) Some municipalities received glass fibre cables that cannot be upgraded to DSL; I use these municipalities as a treatment group with reduced online competition. (2) German law mandates resale price maintenance for books; I compare three retailing sectors, electronics (price competition), books (no price competition), and food (no online sales), to identify the effect of price competition: The effect of price competition is highly significant. Full broadband access reduces offline electronics retailers’ producer rents by 1.5 percent per year from 1999 to 2007.

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    Bibliographic Info

    Paper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 345.

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    Date of creation: Nov 2010
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    Handle: RePEc:trf:wpaper:345

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    Related research

    Keywords: Internet; Market Structure; Retail Competition; Differences in Differences;

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