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Spatial Internet Spillovers in Manufacturing

Author

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  • Joël Cariolle

    (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)

  • Maëlan Le Goff

    (AFD - Agence française de développement)

Abstract

Does local internet diffusion spur manufacturing performance in developing countries? To answer this question, we conduct instrumental variable estimations, using repeated cross-section data on 44,073 manufacturing firms from 109 developing and transition economies, and find large positive spillover effects of local email incidence on manufacturing firms sales and sales per worker. This evidence is driven by the local dissemination of email technology within industries rather than across industries. However, further analysis stresses that inter-industry spillovers are actually U-shaped, that is, negative at low email incidence rates but turning positive once incidence reaches approximately 50% of the local universe of firms. This suggests that local internet spillovers across industries are subject to network effects. Last, these threshold effects seem related to the presence of outward-oriented firms, which are known to exhibit higher digital absorptive capacity. Overall, this paper shows that local industrialisation paces may strongly diverge between poorly and highly digitalised environments.

Suggested Citation

  • Joël Cariolle & Maëlan Le Goff, 2023. "Spatial Internet Spillovers in Manufacturing," Post-Print hal-04217420, HAL.
    • Handle: RePEc:hal:journl:hal-04217420
    DOI: 10.1080/00220388.2023.2204177
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    Cited by:

    1. Joël Cariolle & Camille da Piedade, 2023. "Digital connectedness and exports upgrading: Is sub‐Saharan Africa catching up?," The World Economy, Wiley Blackwell, vol. 46(11), pages 3325-3344, November.
    2. Cariolle, Joël & Elkhateeb, Yasmine & Maurel, Mathilde, 2024. "Misinformation technology: Internet use and political misperceptions in Africa," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 400-433.
    3. Joël Cariolle & Yasmine Elkhateeb & Mathilde Maurel, 2022. "(Mis-)information technology: Internet use and perception of democracy in Africa," Documents de travail du Centre d'Economie de la Sorbonne 22010, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    4. Ackah, Charles & Hanley, Aoife & Hecker, Lars & Kodom, Michael, 2024. "Urbanized and savvy: Which African firms are making the most of mobile money?," KCG Working Papers 35, Kiel Centre for Globalization (KCG).
    5. Ackah, Charles & Hanley, Aoife & Hecker, Lars & Kodom, Michael, 2024. "Urbanized and savvy - which African firms are making the most of mobile money?," Kiel Working Papers 2274, Kiel Institute for the World Economy.
    6. Joël Cariolle & Florian Léon, 2022. "How internet helped firms cope with COVID-19 [Comment internet a aidé les entreprises à faire face à la Covid-19]," Post-Print hal-03606071, HAL.
    7. Yanlin Sun & Shaoxiong Ma & Hao Feng, 2023. "The New Geography of Manufacturing in China: The Internet and Manufacturing Agglomeration," Sustainability, MDPI, vol. 15(17), pages 1-21, August.
    8. Imbruno, Michele & Cariolle, Joël & de Melo, Jaime, 2025. "Digital connectivity and firm participation in foreign markets: An exporter-based bilateral analysis," Journal of Development Economics, Elsevier, vol. 177(C).

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