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Are Internet and Face-to-Face Contacts Complements or Substitutes? Evidence from Internet Traffic between Cities

David Cuberes ()

No 2013010, Working Papers from The University of Sheffield, Department of Economics

Abstract: This paper uses a new dataset on Internet flows between cities around the world to study whether electronic communication and face-to-face contacts are substitutes or complements. In order to test these competing hypotheses I estimate a regression of bilateral Internet traffic on physical distance between pairs of cities and several city and country-specific variables that include a control for cities’ population, countries’ population and per capita GDP, the number of Internet users, the intensity of trade between countries, and several dummies that aim to capture city specific effects and the degree of familiarity between residents of different countries. The estimates reveal a strong and robust negative effect of distance on the intensity of electronic communications, suggesting that Internet and face-to-face contacts are more likely to be complements than substitutes.

Keywords: cities; Internet; face-to-face contacts; death of distance (search for similar items in EconPapers)
JEL-codes: R12 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013
New Economics Papers: this item is included in nep-geo, nep-ict, nep-int, nep-soc and nep-ure
References: View references in EconPapers View complete reference list from CitEc
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