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Are Internet and Face-to-Face Contacts Complements or Substitutes? Evidence from Internet Traffic between Cities


  • David Cuberes

    () (Department of Economics, The University of Sheffield)


This paper uses a new dataset on Internet flows between cities around the world to study whether electronic communication and face-to-face contacts are substitutes or complements. In order to test these competing hypotheses I estimate a regression of bilateral Internet traffic on physical distance between pairs of cities and several city and country-specific variables that include a control for cities’ population, countries’ population and per capita GDP, the number of Internet users, the intensity of trade between countries, and several dummies that aim to capture city specific effects and the degree of familiarity between residents of different countries. The estimates reveal a strong and robust negative effect of distance on the intensity of electronic communications, suggesting that Internet and face-to-face contacts are more likely to be complements than substitutes.

Suggested Citation

  • David Cuberes, 2013. "Are Internet and Face-to-Face Contacts Complements or Substitutes? Evidence from Internet Traffic between Cities," Working Papers 2013010, The University of Sheffield, Department of Economics.
  • Handle: RePEc:shf:wpaper:2013010

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    References listed on IDEAS

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    Cited by:

    1. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2015. "The Role of Foreign Networks for Firm Export of Services," Working Papers 2015:6, Örebro University, School of Business.
    2. Antoci, Angelo & Sabatini, Fabio & Sodini, Mauro, 2014. "Online and offline social participation and social poverty traps. Can social networks save human relations?," MPRA Paper 55703, University Library of Munich, Germany.
    3. Hatzigeorgiou, Andreas & Lodefalk, Magnus, 2017. "Migration and Servicification: Do Immigrant Employees Spur Firm Exports of Services?," Ratio Working Papers 298, The Ratio Institute.

    More about this item


    cities; Internet; face-to-face contacts; death of distance;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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