The Impact of the Internet on Retail Competition: Evidence from Technological Differences in Internet Access

Georg Gebhardt

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: Does the internet increase competition? To address this question, I exploit two institutional details unique to Germany: (1) Some municipalities received glass fibre cables that cannot be upgraded to DSL; I use these municipalities as a treatment group with reduced online competition. (2) German law mandates resale price maintenance for books; I compare three retailing sectors, electronics (price competition), books (no price competition), and food (no online sales), to identify the effect of price competition: The effect of price competition is highly significant. Full broadband access reduces offline electronics retailers’ producer rents by 1.5 percent per year from 1999 to 2007.

Keywords: Internet; Market Structure; Retail Competition; Differences in Differences (search for similar items in EconPapers)
JEL-codes: D43 L13 L81 (search for similar items in EconPapers)
Date: 2010-11
New Economics Papers: this item is included in nep-com, nep-ict and nep-mkt
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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