How Did Location Affect Adoption of the Commercial Internet? Global Village vs. Urban Leadership

Posted: 21 Feb 2006

See all articles by Chris Forman

Chris Forman

Cornell University - Dyson School of Applied Economics and Management; Georgia Institute of Technology - Scheller College of Business

Avi Goldfarb

University of Toronto - Rotman School of Management

Shane M. Greenstein

Harvard University - Technology & Operations Management Unit; National Bureau of Economic Research (NBER)

Abstract

We provide a framework and evidence to confront two contradictory yet common assertions: (1) new technology such as the Internet favors businesses in urban areas and (2) the Internet reduces the importance of distance for economic activity. Controlling for other factors, we show that participation in the Internet is more likely in rural areas than in urban areas. This is particularly true for technologies that involve communication across establishments. Nevertheless, talk of the dissolution of cities is premature. Frontier Internet technologies for communication within an establishment appear more often at establishments in urban areas, even with industry controls.

Keywords: Internet, Adoption, Empirical Studies, Agglomeration

JEL Classification: L63, L86, R0

Suggested Citation

Forman, Chris and Goldfarb, Avi and Greenstein, Shane M., How Did Location Affect Adoption of the Commercial Internet? Global Village vs. Urban Leadership. Journal of Urban Economics, Vol. 58, No. 3, pp. 389-420, 2005. Available at SSRN: https://ssrn.com/abstract=882580

Chris Forman (Contact Author)

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Avi Goldfarb

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada
416-946-8604 (Phone)
416-978-5433 (Fax)

Shane M. Greenstein

Harvard University - Technology & Operations Management Unit ( email )

Boston, MA 02163
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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