Evaluating the Impact of Online Market Integration - Evidence from the EU Portable PC Market

Frank Verboven, Lukasz Grzybowski, Andre Romahn and Duch-Brown, Néstor
Authors registered in the RePEc Author Service: Néstor Duch Brown

No 14864, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We develop a framework to evaluate the impact of market integration, accounting for spillovers between multiple distribution channels. Our adaptation of the standard random coefficients logit demand model allows for substitution between distribution channels and incorporates consumer arbitrage across countries. We apply our framework to the European portable PC market, where geo-blocking practices that restrict online trade have recently been banned. The total consumer and welfare gains from reducing cross-border arbitrage costs are relatively modest, and entirely due to increased product choice rather than reduced price discrimination. At the same time, the distributional effects from the cross-country price convergence are substantial. Consumers in high income countries gain most, while consumers in medium and low income countries are only marginally better or even worse off.

Keywords: market integration; Online trade restrictions; Geoblocking; Pc industry (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-com and nep-eur
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Evaluating the Impact of Online Market Integration—Evidence from the EU Portable PC Market (2023)
Working Paper: Evaluating the Impact of Online Market Integration-Evidence from the EU Portable PC Market (2022)
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