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The effect of broadband on European Union trade: A regional spatial approach
Author(s) -
Barbero Javier,
RodriguezCrespo Ernesto
Publication year - 2018
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12723
Subject(s) - gravity model of trade , european union , proxy (statistics) , gravity equation , international trade , bilateral trade , information and communications technology , broadband , international economics , economics , regional trade , economic geography , geography , free trade , telecommunications , political science , computer science , archaeology , machine learning , china , law
Abstract The positive effect of information and communication technologies (ICT) on trade between countries has been widely studied in the literature, but how ICT impacts regional trade is limited due to the lack of regional trade data. In this paper, we test whether broadband, as a proxy for ICT, increases bilateral trade at the regional level in Europe. We use a novel regional trade database of European Union regions and estimate an origin–destination flow gravity model for 2007 and 2010, accounting for spatial dependence among trade flows. Our results indicate that broadband is positive and significant in explaining trade patterns between European regions during both time periods.