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Information in the First Globalization: News Agencies and Trade

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  • Pierre Cotterlaz
  • Etienne Fize

Abstract

This paper documents the effect of information frictions on trade using a historical large-scale improvement in the transmission of news: the emergence of global news agencies. The information available to potential traders became more abundant, was delivered faster and at a cheaper price between countries covered by a news agency. Exploiting differences in the timing of telegraph openings and news agency coverage across pairs of countries, we are able to disentangle the pure effect of information from the effect of a reduction in communication costs. Panel gravity estimates reveal that bilateral trade increased by 30\% more for pairs of countries covered by a news agency and connected by a telegraph than for pairs of countries simply connected by a telegraph.

Suggested Citation

  • Pierre Cotterlaz & Etienne Fize, 2021. "Information in the First Globalization: News Agencies and Trade," Working Papers 2021-02, CEPII research center.
    • Handle: RePEc:cii:cepidt:2021-02
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    References listed on IDEAS

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    2. repec:ehl:wpaper:59304 is not listed on IDEAS
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    6. Robert Jensen, 2007. "The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 879-924.
    7. Dasgupta, Kunal & Mondria, Jordi, 2018. "Inattentive importers," Journal of International Economics, Elsevier, vol. 112(C), pages 150-165.
    8. Ejrnæs, Mette & Persson, Karl Gunnar, 2010. "The gains from improved market efficiency: trade before and after the transatlantic telegraph," European Review of Economic History, Cambridge University Press, vol. 14(3), pages 361-381, December.
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    Cited by:

    1. Whelsy Boungou & Francis Osei-Tutu & Amara Zongo, 2024. "Democracy and Intra-Africa Trade," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 66(1), pages 70-90, March.
    2. Bjørnskov, Christian & Schröder, Philipp J.H., 2023. "Press freedom, market information, and international trade," European Journal of Political Economy, Elsevier, vol. 76(C).
    3. Cui Hu & Ben G. Li, 2025. "Google and China's Trade," Papers 2503.23557, arXiv.org.

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    Keywords

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    JEL classification:

    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F10 - International Economics - - Trade - - - General

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