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The Internet and International Trade in Goods

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  • Jonathan Timmis

Abstract

Previous studies by Freund & Weinhold (2004) and others have highlighted the trade promoting effect of the Internet. However, recent developments in structural gravity modelling emphasise the importance of controlling for multilateral resistance. We employ a gravity framework to assess the role of Internet adoption on trade within OECD countries over the period 1990-2010. We find that when multilateral resistance is controlled for, the Internet has a less clear cut effect on trade flows. Country pairs with relatively higher adoption rates trade more with one another than country pairs with lower adoption rates. However an increase in adoption within country pairs has little effect on trade. These results are robust when controlling for alternative communication technologies and comparison of dial-up and broadband connections.

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  • Jonathan Timmis, "undated". "The Internet and International Trade in Goods," Discussion Papers 12/08, University of Nottingham, GEP.
  • Handle: RePEc:not:notgep:12/08
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    Keywords

    Internet; Technology; Trade; Distance; E-commerce;

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