Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Note: This Working Paper should not be reported as representing the views of the European Central Bank (ECB). Terms of use: Documents inThe views expressed are those of the authors and do not necessarily reflect those of the ECB AbstractAudiovisual services such as music and movies in digital formats have gained substantial importance over the last decade. This paper analyses audiovisual services in a gravity model framework. In particular, we explore the role of virtual proximity -a new proxy for cultural proximity based on bilateral hyperlinks and bilateral website visits between countries -and find that 'virtually-proximate' countries trade significantly larger amounts of audiovisual services. Our results show that virtual proximity also has a larger impact on trade in audiovisual services than on total services trade. Moreover, in line with Hanson and Xiang (2011), our analysis indicates that in the audiovisual services sector, global fixed export costs dominate bilateral fixed export costs for most countries in our sample.Keywords: International trade; audiovisual services; cultural proximity; hyperlinks; internet JEL Classification: F12, F15, Z10.ECB Working Paper 1826, July 2015 1 Non-technical summaryUp to the early 2000s, cultural products were largely traded in the form of goods, but due to technological advancements over the last decade, they increasingly appear in the services sector. Accordingly, the role of audiovisual services -as reflected by ever increasing digital music and movie sales -has grown substantially over the past decade. Moreover, audiovisual services are contentiously discussed in international trade negotiations, since music, movies and television shows play a key role in transmitting culture and values across the globe. Hence, international trade in audiovisual services and its determinants has been of high interest for both economic researchers and policy-makers.This paper analyses the determinants of audiovisual services trade in a gravity model framework. In particular, we explore the role of virtual proximity -a new proxy for cultural proximity based on bilateral hyperlinks on webpages and bilateral website visits between countries. The idea is to reflect, for instance, how often British or French internet users set links to or visit websites from the United States. The underlying assumption is that cultural proximity of two countries increases with the interest shown in each others' web content.We consider the audiovis...

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper analyses international patterns of bilateral portfolio equity and debt investment in a gravity model framework. We contribute to the literature by exploring the role of virtual proximity -measured by bilateral internet hyperlinks between countries -as a novel proxy for cross-border information flows and cultural proximity more generally. Our findings show that bilateral portfolio investment is significantly affected by virtual proximity, indicating that countries which are more closely connected in terms of web content are more integrated financially. The effect is stronger for equity than for debt investment, highlighting the larger information sensitivity of equity investments, and is largest for investments among advanced economies. Moreover, including virtual proximity in estimations reduces the importance of traditionally-used proxies for information asymmetries and cultural proximity. Non-technical summaryResearch on bilateral investment patterns has grown considerably over the past decade and shows -both empirically and theoretically -that distance and proxies for informational asymmetries between countries, such as common language, colonial ties and currency unions, are crucial in explaining bilateral asset holdings and flows. Thus, asset trade can be estimated by gravity models, implying a proximity bias in international investments due to information asymmetries that are increasing in distance.We contribute to this literature by exploring the role of virtual proximity -measured by bilateral hyperlinks between countries. The idea is to reflect, for instance, how often British orFrench internet users set links to websites from the United States. In case this indicator is, ceteris paribus, higher for the United Kingdom than for France, we interpret this as British citizens being virtually closer to the United States than the French. The underlying assumption is that virtual proximity of two countries increases with the interest shown in each others' web content.Our virtual proximity measure thus captures global interconnectedness and information flows.As such, virtual proximity is a good measure for the potential information set of international investors. Virtual connectedness should reduce uncertainty about the expected pay-offs of international investment decisions and thus foster international financial integration. In addition, in light of the pivotal role of the internet, web-based measures of r...

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Modern artists, Age, Life cycle, Creativity, N80, Z11,

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