Has the Internet Increased Trade? Developed and Developing Country Evidence

Posted: 29 Feb 2008

See all articles by George R. G. Clarke

George R. G. Clarke

Texas A&M International University - A.R. Sanchez Jr., School of Business

Scott Wallsten

Technology Policy Institute

Date Written: July 2006

Abstract

Developing countries export more to developed, but not other developing countries, when Internet penetration is higher. Although this could be because Internet penetration stimulates exports, it could also be because trade openness encourages Internet use. To test the direction of causation, we allow Internet use to be determined endogenously using countries' regulation of data services as an instrument. The results suggest that access to the Internet does improve export performance in developing countries, although not in developed countries. In other words, improving Internet access in a developing country will stimulate exports from that country to rich countries. (JEL F15)

Suggested Citation

Clarke, George and Wallsten, Scott, Has the Internet Increased Trade? Developed and Developing Country Evidence (July 2006). Economic Inquiry, Vol. 44, Issue 3, pp. 465-484, 2006. Available at SSRN: https://ssrn.com/abstract=1095593 or http://dx.doi.org/10.1093/ei/cbj026

George Clarke

Texas A&M International University - A.R. Sanchez Jr., School of Business ( email )

5201 University Blvd.
Laredo, TX 78041-1900
United States

Scott Wallsten

Technology Policy Institute ( email )

409 12th St., SW
Ste 700
Washington, DC 20024
United States
2027309441 (Phone)

HOME PAGE: http://www.wallsten.net

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