 Technology-induced trade shocks? Evidence from broadband expansion in FranceClément Malgouyres, Thierry Mayer and Clément Mazet-Sonilhac Journal of International Economics, 2021, vol. 133, issue C 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) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:133:y:2021:i:c:s0022199621001008 DOI: 10.1016/j.jinteco.2021.103520 Access Statistics for this article Journal of International Economics is currently edited by Martin Uribe and Costas Arkolakis More articles in Journal of International Economics from Elsevier |
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