Internet Penetration and Trade Patterns: Sectoral Effects and Informational Barriers

This study examines the effect of Internet expansion on international trade flows for 53 developed and emerging economies between 2000 and 2016. A structural gravity model estimated via Poisson Pseudo Maximum Likelihood is employed to assess both aggregate and sectoral trade impacts. The empirical strategy incorporates a continuous measure of linguistic distance, which captures degrees of dissimilarity between national languages, offering a reference for informational frictions than conventional binary indicators. The main findings show that broadband penetration is positively associated with trade flows, with heterogeneous effects across sectors. While the aggregate impact is relatively modest—a doubling in broadband subscriptions is associated with a 0.7% increase in total trade—stronger effects are observed in the primary sector (5.3%) and in energy and mining (7.1%). Manufacturing responds positively, though with smaller elasticities, possibly due to its greater capacity to internalize digital technologies. Linguistic distance is found to significantly reduce trade in standardized goods, underscoring how non-physical barriers interact with digital infrastructure. These results suggest that expanding broadband access, when combined with targeted measures to reduce informational and communicative frictions, may support more inclusive trade integration and enable export diversification in economies with limited digital or linguistic connectivity. Classification codes : F00; F10; F14; F19.