Digital connectivity and firm participation in foreign markets: An exporter-based bilateral analysis

Michele Imbruno, Joël Cariolle and Jaime de Melo

No 17318, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies how bilateral digital connectivity resulting from telecommunications submarine cable (SMC) deployment affects firm participation in export markets. Based on a heterogeneous firm model and using an unbalanced panel of bilateral trade data across 48 countries during the period 1997-2014, we find that an SMC connection between two countries is associated with an increase in the number of bilateral exporters in developed countries, but also with a reduction in the number of bilateral exporters in developing countries. This negative association between bilateral connectivity and firm participation in export markets appears to be stronger in the poorest developing areas: Middle East and North Africa, South Asia and Sub-Saharan Africa. The growth in world connectivity spurred by SMCs deployment has therefore had a heterogeneous effect on firm decision to export, pushing more firms from high-income countries to enter export markets, and some incumbent exporters from lower-income countries to exit them.

Keywords: Internet connectivity; Ict; Submarine cables; Export behaviour (search for similar items in EconPapers)
JEL-codes: F12 F14 O19 O33 (search for similar items in EconPapers)
Date: 2022-05
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17318 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Digital connectivity and firm participation in foreign markets: An exporter-based bilateral analysis (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:17318

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17318

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().