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Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France

Clément Magouyres, Thierry Mayer and Clément Mazet-Sonilhac ()
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Clément Magouyres: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Clément Mazet-Sonilhac: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, Centre de recherche de la Banque de France - Banque de France

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Abstract: In this paper, we document the presence of "technology-induced" trade in France between 1997 and 2007 and assess its impact on consumer welfare. We use the staggered roll-out of broadband internet to estimate its causal effect on the importing behavior of affected firms. Using an event-study design, we find that broadband expansion increases firm-level imports by around 25%. We further find that the "sub-extensive" margin (number of products and sourcing countries per firm) is the main channel of adjustment and that the effect is larger for capital goods. Finally, we develop a model where firms optimize over their import strategy and which yields a sufficient statistics formula for the quantification of the effects of broadband on consumer welfare. Interpreted within this model, our reduced-form estimates imply that broadband internet reduced the consumer price index by 1.7% and that the import-channel, i.e. the enhanced access to foreign goods that is allowed by broadband, accounts for a quarter of that effect.

Keywords: Internet; Trade; Imports; Consumer welfare (search for similar items in EconPapers)
Date: 2019-07-01
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03393079v1
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Related works:
Journal Article: Technology-induced trade shocks? Evidence from broadband expansion in France (2021) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2021) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2021) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2021) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
Working Paper: Technology-Induced Trade Shocks? Evidence from Broadband Expansion in France (2019) Downloads
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