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Internet Penetration by Country Income Group, 2002-2015

Internet Penetration by Country Income Group, 2002-2015

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Gravity models have been extensively used as workhorse models to study the determinants of international trade. While most of the literature has focused on trade in manufacturing, a recent literature has emerged that uses gravity models to study international trade in services. Despite showing that gravity equations are well suited to studying trad...

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... data is obtained from the World Development Indicators, World Bank (2018), for 2002-2015. Figure 3 shows the rapid growth of internet users globally since the early 2000s, while there still exists a considerable gap in the usage between high-and low-income countries. In explaining bilateral trade, internet penetration is viewed as a factor that reduces bilateral trade costs vis-` a-vis all trading countries. ...

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