The Role of Internet Use on International Trade: Evidence from Asian and Sub-Saharan African Enterprises

Abstract

Internet use is expected to reduce fixed information-related costs of entering international markets. This paper looks at the impact of internet use by developing country firms from Asia and Sub-Saharan Africa on their export and input import behavior. Using the enterprise survey dataset from the World Bank, the paper finds that e-mail and own website use have a positive impact on the extensive margin of enterprise export and input import behavior but not on the intensive margin. In addition, both these internet tools affect export and input import likelihood of manufacturing enterprises only and not of service enterprises. These results are robust after controlling for self-selection bias and for factors that may affect both internet adoption and international market participation.