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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.

Suggested Citation

  • George R. G. Clarke & Scott J. Wallsten, 2006. "Has the Internet Increased Trade? Developed and Developing Country Evidence," Economic Inquiry, Western Economic Association International, vol. 44(3), pages 465-484, July.
  • Handle: RePEc:oup:ecinqu:v:44:y:2006:i:3:p:465-484
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    Citations

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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, pages 137-163.
    2. George R. G. Clarke, 2009. "Beyond Tariffs and Quotas: Why Do African Manufacturers Not Export More?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 45(2), pages 44-64, March.
    3. Huang, Ting Ting & Sun, Bruce Qiang, 2016. "The impact of the Internet on global industry: New evidence of Internet measurement," Research in International Business and Finance, Elsevier, vol. 37(C), pages 93-112.
    4. 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.
    5. Keita, Moussa, 2016. "Does ICT Development Flatten the Globe? Evidence from International Trade Costs Data," MPRA Paper 69882, University Library of Munich, Germany.
    6. Uday M. Apte & Hiranya K. Nath, 2012. "U.S. Trade In Information-Intensive Services," World Scientific Book Chapters,in: The UCLA Anderson Business and Information Technologies (BIT) Project A Global Study of Business Practice (2012), chapter 6, pages 117-144 World Scientific Publishing Co. Pte. Ltd..
    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.
    8. Jonathan Timmis, "undated". "The Internet and International Trade in Goods," Discussion Papers 12/08, University of Nottingham, GEP.
    9. Joël CARIOLLE & Maëlan LE GOFF & Olivier SANTONI, 2017. "Fast Internet, digital vulnerabilities and firm performances in developing and transition countries," Working Papers P195, FERDI.
    10. repec:bla:reviec:v:25:y:2017:i:3:p:649-676 is not listed on IDEAS
    11. George R. G. Clarke, 2009. "Beyond Tariffs and Quotas: Why Do African Manufacturers Not Export More?," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 45(2), pages 44-64, March.
    12. Valenciano, Jaime de Pablo & Battistuzzi, Miguel Angel Giacinti & Azcaráte, Tomás García, 0. ""Banana War" And World Trade Changes," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3.
    13. Hakan Yilmazkuday, 2017. "A Solution to the Missing Globalization Puzzle by Non-CES Preferences," Review of International Economics, Wiley Blackwell, pages 649-676.
    14. Lirong Liu & Hiranya Nath, 2016. "Information and Communications Technology (ICT) and Services Trade," Working Papers 1601, Sam Houston State University, Department of Economics and International Business.
    15. Jonathan Timmis, 2013. "Internet Adoption and Firm Exports in Developing Economies," Discussion Papers 2013-05, University of Nottingham, GEP.
    16. Joël Cariolle & Maëlan Le Goff & Olivier Santoni, 2017. "Fast Internet, digital vulnerabilities and firm performances in developing and transition countries," Post-Print hal-01569846, HAL.
    17. Burcu Ozcan & Hiranya Nath, 2016. "Information and Communication Technology (ICT) and International Trade: Evidence from Turkey," Working Papers 1609, Sam Houston State University, Department of Economics and International Business.
    18. Jonathan Timmis, "undated". "The Internet and International Trade in Goods," Discussion Papers 12/03, University of Nottingham, School of Economics.
    19. Joël CARIOLLE & Maëlan LE GOFF & Olivier SANTONI, 2017. "Fast Internet, digital vulnerabilities and firm performances in developing and transition countries," Working Papers P195, FERDI.

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    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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