Virtual proximity and audiovisual services trade

Hellmanzik, Christiane; Schmitz, Martin

doi:10.1016/j.euroecorev.2015.03.014

Cited by 43 publications

(39 citation statements)

References 23 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Employing Hellmanzik and Schmitz's (2015) methodology, Shi (2016) tests the effect of internet use on firms' exporting by employing bilateral links through the internet as a proxy variable. The evidence shows that use of the internet could increase the duration of export agreements and have a remarkable effect by extending the intensive and extensive margins.…”

mentioning

confidence: 99%

Does “Internet Plus” Promote New Export Space for Firms? Evidence from China

Huang

Song

2018

China and World Economy

View full text Add to dashboard Cite

Based on data from the Chinese Industrial Enterprises Database, this paper investigates the effect of “Internet Plus” on the trade destination mix at the enterprise level. The analysis extends the classic dual margins to three dimensions: destination extensive, destination intensive and destination structural margins. The paper suggests that connecting to the internet not only raises Chinese firms' propensity to export, but also extends the destination extensive margin. In addition, Internet Plus could create a synergistic effect for internet‐enabled enterprises, that is, the development of the destination country's internet access benefits domestic firms' export participation. Finally, the paper finds that Internet Plus, rather than increasing the intensive or structural margins, leads to the transfer of exports to lower‐middle‐income countries and helps firms achieve competitiveness and thus increases their profit. The paper provides an explanatory mechanism and empirical evidence for firms' use of the internet to optimize export space.

show abstract

mentioning

confidence: 99%

Does “Internet Plus” Promote New Export Space for Firms? Evidence from China

Huang

Song

2018

China and World Economy

View full text Add to dashboard Cite

show abstract

“…Regarding exports of services, Freund and Weinhold (2002) show that internet development in its partner countries has resulted in increased exports of services to the United States. Using Chung's (2011) data on bilateral webpage hyperlinks, Hellmanzik and Schmitz (2015) find that 'virtually-proximate' countries trade significantly larger amounts of audiovisual services and that virtual proximity has a larger impact on trade in audiovisual services than on total services trade. Based on a sample of US internet users, Blum and Goldfarb (2006) point out that a gravity model also holds digitally, as physical distance has a negative impact on the online consumption of taste-dependent digital products such as music and games.…”

Section: Introductionmentioning

confidence: 99%

Taking gravity online: The role of virtual proximity in international finance

Hellmanzik

Schmitz

2017

Journal of International Money and Finance

Self Cite

View full text Add to dashboard Cite

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...

show abstract

“…Using probit and fractional probit models with the World Bank’s 2005 China micro survey data, Ru and Li () find that e‐commerce significantly increases the export probabilities of Chinese companies, but this effect is affected by the size of the enterprise, the nature of the business, and productivity. Using the method proposed by Hellmanzik and Schmitz (), proxying for Internet development using the total number of bilateral URL links between China and the destination country, and measuring the export effect of the Internet at the enterprise level, Shi () shows that the Internet significantly increases the probability of entry into the export market, expands the export profile, and prolongs export survival time.…”

Section: Related Literaturementioning

confidence: 99%

“…Internet use can significantly reduce firm’s costs of cross‐border market information searching and communication, thus lowering the productivity threshold required for entering the export market (Melitz, ). Beginning with Freund and Weinhold (), a large body of literature has explored the impact of the Internet on international trade (Clarke, ; Hellmanzik & Schmitz, ; Shi, ; Tang, ). However, most of these studies rely on the gravity model based on transnational macro data, and few studies so far have examined the impact of the Internet on firm‐level export behavior and performance.…”

Section: Introductionmentioning

confidence: 99%

“…Third, the total number of unilateral or bilateral URL links is often used as the proxy variable for Internet development in previous literature. It is also plausible that the number of websites and the proportion of netizens in the total population are used as proxies for Internet development of a country (Hellmanzik & Schmitz, ; Shi, ). These measures obviously ignore the difference in the actual Internet use by enterprises.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Internet use and export upgrading: Firm‐level evidence from China

Huang

Song

2019

Rev International Economics

View full text Add to dashboard Cite

This paper explores the impact of widespread Internet use on the product choices of exporters. Based on a highly disaggregated firm-product-level data matched from the Annual Survey of Industrial Firms and China Customs TransactionDatabase, our baseline empirical analysis suggests that (1) Internet use (i.e., having an official website or corporate email) affects both extensive margin and quality margin of exported products; (2) exporters using Internet propone to expand their product line of export by introducing new products (cost-reduction effect on extensive margin); (3) the average quality of exported products becomes lower after the Internet is adopted by exporters (competition effect on quality margin). Our heterogeneous analysis further shows that (1) exporters with high productivity are immune to the negative impact of Internet use on quality margin and maintain quality growth; (2) having an official website exerts larger impacts on both extensive margin and quality margin compared with only having a corporate email system. Our research sheds light on the existing literature on Internet use and firm export behaviors.

show abstract

Virtual proximity and audiovisual services trade

Cited by 43 publications

References 23 publications

Does “Internet Plus” Promote New Export Space for Firms? Evidence from China

Does “Internet Plus” Promote New Export Space for Firms? Evidence from China

Taking gravity online: The role of virtual proximity in international finance

Internet use and export upgrading: Firm‐level evidence from China

Contact Info

Product

Resources

About