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Disaggregating the impact of the internet on international trade

Author

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  • Osnago,Alberto
  • Tan,Shawn Weiming

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.

Suggested Citation

  • Osnago,Alberto & Tan,Shawn Weiming, 2016. "Disaggregating the impact of the internet on international trade," Policy Research Working Paper Series 7785, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7785
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    Citations

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    Cited by:

    1. Michele Imbruno & Joel Cariolle & Jaime de Melo, 2022. "Digital connectivity and firm participation in foreign markets: An exporter-based bilateral analysis," Discussion Papers 2022-02, University of Nottingham, GEP.
    2. World Bank, 2020. "Accelerating Digital Transformation in Zambia," World Bank Publications - Reports 33806, The World Bank Group.
    3. Nam Hoang Vu & Tuan Anh Bui & Tram Bao Hoang & Hanh My Pham, 2022. "Information technology adoption and integration into global value chains: Evidence from small‐ and medium‐sized enterprises in Vietnam," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(2), pages 259-286, March.
    4. Lynda Sanderson & Garrick Wright-McNaughton & Naomitsu Yashiro, 2022. "Does high-speed internet boost exporting?," Working Papers 2022/02, New Zealand Productivity Commission.
    5. Lee Yub, 2018. "Ecommerce and Firm Performance: Evidence from Korea," Working Papers id:12428, eSocialSciences.
    6. Zi Hui Yin & Chang Hwan Choi, 2023. "The effects of China’s cross-border e-commerce on its exports: a comparative analysis of goods and services trade," Electronic Commerce Research, Springer, vol. 23(1), pages 443-474, March.
    7. Joël Cariolle & Michele Imbruno & Jaime de Melo, 2020. "Bilateral digital connectivity and firm participation in export markets," Working Papers hal-03182438, HAL.
    8. Visser, Robin, 2019. "The effect of the internet on the margins of trade," Information Economics and Policy, Elsevier, vol. 46(C), pages 41-54.
    9. Shetewy, Nsreen & Shahin, Ahmed Ismail & Omri, Anis & Dai, Kuizao, 2022. "Impact of financial development and internet use on export growth: New evidence from machine learning models," Research in International Business and Finance, Elsevier, vol. 61(C).
    10. Lee, Sooyoung, 2017. "Anatomy of the Trade Collapse, Recovery, and Slowdown: Evidence from Korea," Working Papers 17-3, Korea Institute for International Economic Policy.
    11. Yifei Mu & Zhen Chen & Yibing Ding & Yuqing Wang & Bo Pang, 2020. "How the Internet Promotes China's Exports: A Firm‐level Perspective," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(5), pages 118-142, September.
    12. Sun, Meng, 2021. "The Internet and SME Participation in Exports," Information Economics and Policy, Elsevier, vol. 57(C).

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