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Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France

Clément Malgouyres, Thierry Mayer and Clément Mazet-Sonilhac (clement.mazet@sciencespo.fr)
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Clément Mazet-Sonilhac: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, Centre de recherche de la Banque de France - Banque de France

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Abstract: In this paper, we document the presence of "technology-induced" trade in France between 1997 and 2007 and assess its impact on consumer welfare. We use the staggered roll-out of broadband internet to estimate its causal effect on the importing behavior of affected firms. Using an event-study design, we find that broadband expansion increases firm-level imports by around 25%. The effect on domestic sales is positive but smaller, suggesting that the impact on trade is not limited to a scale effect. We further find that the "sub-extensive" margin (number of products and sourcing countries per firm) is the main channel of adjustment. Finally, we develop a model where firms optimize over their import strategy which yields a sufficient statistics formula for the quantification of the effects of broadband on consumer welfare. Interpreted within this model, our reduced-form estimates imply that broadband internet reduced the consumer price index by 2.22% and that the import-channel, i.e. the enhanced access to foreign goods that is allowed by broadband, accounts for about 33% of that effect.

Keywords: Internet; Trade Imports; Consumer welfare (search for similar items in EconPapers)
Date: 2021-11
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03325831v1
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Citations: View citations in EconPapers (5)

Published in Journal of International Economics, 2021, 133, ⟨10.1016/j.jinteco.2021.103520⟩

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Related works:
Journal Article: Technology-induced trade shocks? Evidence from broadband expansion in France (2021) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2021) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2021) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:halshs-03325831

DOI: 10.1016/j.jinteco.2021.103520

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