Disaggregating the impact of the internet on international trade

Alberto Osnago and Shawn Tan

No 7785, Policy Research Working Paper Series from The World Bank

Abstract: The Internet has transformed the way countries trade by reducing the costs of exporting. This paper quantifies the impact of Internet adoption on international trade. It shows that the Internet has a positive, nuanced, impact on international trade: bilateral exports are more affected when Internet adoption increases in the exporter than importer. A 10 percent increase in the exporter's Internet adoption leads to a 1.9 percent increase in bilateral exports, largely explained by an increase in the number of goods exported. A 10 percent increase in the importer's Internet adoption leads to a 0.6 percent increase in bilateral exports, explained by an increase in the average value of existing exported goods. The analysis also finds that when both countries have high levels of Internet adoption they are more likely to trade with each other, compared with country pairs with different (high and low) or low levels of Internet adoption.

Keywords: International Trade and Trade Rules; Technology Innovation; Private Sector Economics; Private Sector Development Law; Technology Industry; Marketing; Trade and Multilateral Issues (search for similar items in EconPapers)
Date: 2016-08-08
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Citations: View citations in EconPapers (12)

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