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Measuring the competitive impact of the internet: Evidence from a natural experiment in broadband access

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  • Gebhardt, Georg

Abstract

To identify the competitive effect of online competition, I exploit that consumers in some German municipalities lack broadband access due to legacy glass fibre cables. In these areas with reduced online competition, I find that offline employment in electronics retailing grows faster than in the control areas. I find no such differential for food retailing, where there is no online competition. Full broadband access reduces employment growth in electronics relative to food retailing by 1.1% per year from 1999 to 2007. I find no significant effect for book retailing, which is shielded from retail price competition by law.

Suggested Citation

  • Gebhardt, Georg, 2018. "Measuring the competitive impact of the internet: Evidence from a natural experiment in broadband access," International Journal of Industrial Organization, Elsevier, vol. 57(C), pages 84-113.
    • Handle: RePEc:eee:indorg:v:57:y:2018:i:c:p:84-113
    DOI: 10.1016/j.ijindorg.2017.12.006
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    Cited by:

    1. Chun, Hyunbae & Joo, Hailey Hayeon & Kang, Jisoo & Lee, Yoonsoo, 2020. "Diffusion of E-Commerce and Retail Job Apocalypse: Evidence from Credit Card Data on Online Spending," CEI Working Paper Series 2020-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    2. Donghan Shin & Hyunbae Chun, 2023. "The Rise of E-Commerce and the Local Wage Structure: Evidence from the Korean Retail Industry," Korean Economic Review, Korean Economic Association, vol. 39, pages 315-345.

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    More about this item

    Keywords

    Internet; Market structure; Differences in differences;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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