International Trade in Online Services

Abstract

It aims to provide evidence-based scientific support to the European policy-making process. The scientific output expressed does not imply a policy position of the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of this publication.

Digital Economics

“…Distance matters because it proxies for taste similarity. Alaveras and Martens (2015) replicates this core result using much richer data on website visits by users in a large number of countries. Sinai and Waldfogel (2004) also shows that highly populated areas produce more content, and that because tastes are spatially correlated in the sense that people are more likely to consume local media than distant media, people in highly populated areas are particularly likely to go online.…”

“…Gomez-Herrera, Martens, and Turlea (2014) suggest, however, that this increase may disproportionately benefit English-language countries. Several of the papers highlighted earlier in this review demonstrate that the Internet facilitated trade in digital services (Blum and Goldfarb 2006, Alaveras and Martens 2015, and Lendle et al 2016, and this might lead to offshoring of certain jobs . While there is some debate about whether distance matters less overall than it did prior to the diffusion of the Internet (Leamer 2007, Cristea 2011, and Krautheim 2012, our reading of the literature is that those papers that focus on the direct effect of the Internet find a decrease in the role of distance in trade (Freund and Weinhold 2004, Clarke 2008, Lendle et al 2016, while other papers identify other weaker forces moving in the opposite direction.…”

Digital Economics

“…Gomez-Herrera et al (2014) suggests, however, that this increase may disproportionately benefit English-language countries. Several of the papers highlighted earlier in this review demonstrate that the internet facilitated trade in digital services (Blum and Goldfarb, 2006;Alaveras and Martens, 2015;Lendle et al, 2016), and this might lead to offshoring of certain jobs . While there is some debate about whether distance matters less overall than it did prior to the diffusion of the internet (Leamer, 2007;Cristea, 2011;Krautheim, 2012), our reading of the literature is that those papers that focus on the direct impact of the internet find a decrease in the role of distance in trade (Freund and Weinhold, 2004;Clarke, 2008;Lendle et al, 2016;Hui, 2017) while other papers identify other weaker forces moving in the opposite direction.…”

Expanding the international trade and investment policy agenda: The role of cities and services

“…In fact, the empirical evidence on the importance of distance to trade in services is mixed. Some studies find that distance per se has not been found to be a significant factor in services trade (Kandilov & Grennes, 2012;Walsh, 2008), particularly when the services are provided online (Alaveras & Martens, 2015;Lendle, Olarreaga, Schropp, & Vézina, 2016). However, trade in informationbased digital services may rely on countries being virtually rather than geographically proximate, especially trade in financial, communication and insurance services (Hellmanzik & Schmitz, 2015).…”