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Digital Dispersion: An Industrial and Geographic Census of Commerical Internet Use

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  • Chris Forman
  • Avi Goldfarb
  • Shane Greenstein

Abstract

Our study provides the first census of the dispersion of Internet technology to commercial establishments in the United States. We distinguish between participation, that is, use of the Internet because it is necessary for all business (e.g., email and browsing) and enhancement, that is, adoption of Internet technology to enhance computing processes for competitive advantage (e.g., electronic commerce). Employing the Harte Hanks Market Intelligence Survey, we examine adoption of the Internet at 86,879 commercial establishments with 100 or more employees at the end of 2000. Using routine statistical methods, we focus on answering questions about economy-wide outcomes: Which industries had the highest and lowest rates of participation and enhancement? Which cities, states and industries had a typical experience and which did not? We arrive at three conclusions. First, participation and enhancement display contrasting patterns of dispersion. In a majority of industries participation has approached saturation levels, while enhancement occurs at lower rates and with dispersion reflecting long standing industrial differences in use of computing. Second, the creation and use of the Internet does not eliminate the importance of geography. Leading areas are widespread, whereas laggards are more common in smaller urban areas and some rural areas. However, the distribution of industries across geographic regions explains much of the difference in rates of adoption of the Internet in different areas. Third, commercial Internet use is quite dispersed, more so than previous studies show.

Suggested Citation

  • Chris Forman & Avi Goldfarb & Shane Greenstein, 2002. "Digital Dispersion: An Industrial and Geographic Census of Commerical Internet Use," NBER Working Papers 9287, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9287
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    Cited by:

    1. Giuliana Battisti & Heinz Hollenstein & Paul Stoneman & Martin Woerter, 2007. "Inter And Intra Firm Diffusion Of Ict In The United Kingdom (Uk) And Switzerland (Ch) An Internationally Comparative Study Based On Firm-Level Data," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(8), pages 669-687.
    2. Chris Forman & Avi Goldfarb & Shane Greenstein, 2014. "Information Technology and the Distribution of Inventive Activity," NBER Chapters,in: The Changing Frontier: Rethinking Science and Innovation Policy, pages 169-196 National Bureau of Economic Research, Inc.
    3. Betsey Stevenson, 2009. "The Internet and Job Search," NBER Chapters,in: Studies of Labor Market Intermediation, pages 67-86 National Bureau of Economic Research, Inc.
    4. Chris Forman & Avi Goldfarb & Shane Greenstein, 2012. "The Internet and Local Wages: A Puzzle," American Economic Review, American Economic Association, vol. 102(1), pages 556-575, February.
    5. Chris Forman & Nicolas van Zeebroeck, 2012. "From Wires to Partners: How the Internet Has Fostered R&D Collaborations Within Firms," Management Science, INFORMS, vol. 58(8), pages 1549-1568, August.
    6. Jordi Pons-Novell & Elisabet Viladecans-Marsal, "undated". "Cities and the internet: The end of distance?," Studies on the Spanish Economy 198, FEDEA.
    7. Chris Forman, 2005. "The Corporate Digital Divide: Determinants of Internet Adoption," Management Science, INFORMS, vol. 51(4), pages 641-654, April.
    8. Yartey, Charles Amo, 2008. "Financial development, the structure of capital markets, and the global digital divide," Information Economics and Policy, Elsevier, vol. 20(2), pages 208-227, June.
    9. Battisti, Giuliana & Canepa, Alessandra & Stoneman, Paul, 2009. "e-Business usage across and within firms in the UK: profitability, externalities and policy," Research Policy, Elsevier, vol. 38(1), pages 133-143, February.
    10. Chris Forman & Avi Goldfarb & Shane Greenstein, 2003. "How did Location Affect Adoption of the Commercial Internet? Global Village, Urban Density, and Industry Composition," NBER Working Papers 9979, National Bureau of Economic Research, Inc.
    11. Chris Forman & Avi Goldfarb & Shane Greenstein, 2005. "Technology Adoption In and Out of Major Urban Areas: When Do Internal Firm Resources Matter Most?," NBER Working Papers 11642, National Bureau of Economic Research, Inc.
    12. Alessio D'Ignazio & Emanuele Giovannetti, 2007. "Spatial Dispersion of Interconnection Clusters in the European Internet," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(3), pages 219-236.

    More about this item

    JEL classification:

    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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