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

Clément Magouyres, Thierry Mayer and Clément Mazet-Sonilhac ()
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Clément Magouyres: Ecole d'Économie de Paris - Paris School of Economics (PSE)

No 2019-10, Sciences Po Economics Discussion Papers from Sciences Po Departement of Economics

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%. We further find that the “sub-extensive” margin (number of products and sourcing countries per firm) is the main channel of adjustment and that the effect is larger for capital goods. Finally, we develop a model where firms optimize over their import strategy and 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 1.7% and that the import-channel, i.e. the enhanced access to foreign goods that is allowed by broadband, accounts for a quarter of that effect.

Keywords: Internet; Trade; Imports; Consumer welfare (search for similar items in EconPapers)
JEL-codes: F14 F15 F61 F66 L23 O33 (search for similar items in EconPapers)
Date: 2019-07
New Economics Papers: this item is included in nep-eur, nep-ict and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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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 (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
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
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