The impact of the Internet on global industry: New evidence of Internet measurement

Abstract

This paper presents a new way to measure the diffusion of the Internet, using a panel of 10 countries. Different from the previous literature, we use city-level daily databases, downloaded from Cooperative Association for Internet Data Analysis (CAIDA), to construct weekly data across countries. The determinants of Internet cross-traffic traveling are studied using several attributes which offer new opportunities to define network construction and information technology. With the Swiss KOF Globalization Index, this data can be used to reevaluate financial services and business marketing, political interaction and social emergence, and globalization. The major findings are that a significant and positive relationship exists between Internet distance and the different globalization indexes: economic and financial globalization, political globalization, and social globalization. The Internet flows ahead of globalization. The dynamic panel causality analysis demonstrates further empirically the causality of the Internet diffusion on the different indexes of globalization.