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The Internet and Trade

Svensson Rosell, Fredrik LU (2016) NEKN01 20152
Department of Economics
Abstract
This paper aims to assess the effects of internet usage on bilateral trade volumes. Increasingly companies are conducting business online. If the effect of an increased internet usage on trade is positive then it would be yet another reason for policy makers to invest in the development and expansion of IT infrastructure.
Three main models are specified using the fixed effects estimator, including the least squares estimator and a Poisson maximum likelihood estimator. This paper uses an extensive panel data set of 180 countries and the most recent internet usage data available (2000-2014) to examine the effects of internet usage on bilateral trade. By using a gravity model specification the results are indicating a significant positive... (More)
This paper aims to assess the effects of internet usage on bilateral trade volumes. Increasingly companies are conducting business online. If the effect of an increased internet usage on trade is positive then it would be yet another reason for policy makers to invest in the development and expansion of IT infrastructure.
Three main models are specified using the fixed effects estimator, including the least squares estimator and a Poisson maximum likelihood estimator. This paper uses an extensive panel data set of 180 countries and the most recent internet usage data available (2000-2014) to examine the effects of internet usage on bilateral trade. By using a gravity model specification the results are indicating a significant positive relationship between internet usage and bilateral trade performance. The effect is larger when more weight is given to countries with smaller internet usage rates.
The spatial relationship of this effect is also examined via a Hausman-Taylor estimation and a random effects model. The results from these models indicates that there is a proximity effect, the larger the distance between trading countries, the smaller the effect of internet usage on trade. (Less)
Please use this url to cite or link to this publication:
author
Svensson Rosell, Fredrik LU
supervisor
organization
alternative title
An assessment of the effects of internet usage on trade volumes
course
NEKN01 20152
year
type
H1 - Master's Degree (One Year)
subject
keywords
Gravity model, fixed effects, internet usage, trade, panel data.
language
English
id
8595581
date added to LUP
2016-02-11 14:37:53
date last changed
2016-02-11 14:37:53
@misc{8595581,
  abstract     = {This paper aims to assess the effects of internet usage on bilateral trade volumes. Increasingly companies are conducting business online. If the effect of an increased internet usage on trade is positive then it would be yet another reason for policy makers to invest in the development and expansion of IT infrastructure. 
Three main models are specified using the fixed effects estimator, including the least squares estimator and a Poisson maximum likelihood estimator. This paper uses an extensive panel data set of 180 countries and the most recent internet usage data available (2000-2014) to examine the effects of internet usage on bilateral trade. By using a gravity model specification the results are indicating a significant positive relationship between internet usage and bilateral trade performance. The effect is larger when more weight is given to countries with smaller internet usage rates.
The spatial relationship of this effect is also examined via a Hausman-Taylor estimation and a random effects model. The results from these models indicates that there is a proximity effect, the larger the distance between trading countries, the smaller the effect of internet usage on trade.},
  author       = {Svensson Rosell, Fredrik},
  keyword      = {Gravity model,fixed effects,internet usage,trade,panel data.},
  language     = {eng},
  note         = {Student Paper},
  title        = {The Internet and Trade},
  year         = {2016},
}