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Services Trade and Internet Connectivity

Author

Listed:
  • Sam Haltenhof

    (University of Michigan)

Abstract

Internet connectivity and exports of services are positively correlated. This paper presents a gravity model with bilateral measures of Internet connectivity to formalize this correlation. To establish bilateral connectivity, I construct a novel dataset based on the undersea fiber-optic cable network responsible for 99% of international data traffic. I measure the degree of bilateral connectivity using information on the capacities of these cables in order to estimate the effect of that connection on export growth between pairs of digitally connected countries. I estimate a positive relationship between Internet connectivity and bilateral exports in data-intensive industries with an elasticity of 0.25 to 2.25 over a variety of possible settings.

Suggested Citation

  • Sam Haltenhof, "undated". "Services Trade and Internet Connectivity," Working Papers 668, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:668
    as

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    File URL: http://www.fordschool.umich.edu/rsie/workingpapers/Papers651-675/r668.pdf
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    References listed on IDEAS

    as
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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