Does the Internet Defy the Law of Gravity?

@article{Blum2006DoesTI,
  title={Does the Internet Defy the Law of Gravity?},
  author={B. Blum and Avi Goldfarb},
  journal={Information Systems & Economics},
  year={2006}
}
We show that gravity holds in the case of digital goods that are consumed over the Internet and have no trading costs. Therefore, trade costs, although possibly important, cannot account for the effects of distance on trade. In particular, we show that Americans are more likely to visit websites from countries that are physically close than from countries that are far, even after controlling for country-level Internet expertise, language, income, immigrant stock, and many other factors… Expand
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