Abstract and Keywords
The literature on the geographical implications of the Internet are reviewed, both those studying the adoption and use of the Internet, as well as those examining the Internet’s economic consequences for productivity, wealth, innovation, trade, and consumer behavior. The chapter emphasizes that the Internet reduces three key interrelated economic frictions: communication costs, transportation costs, and search costs. The impact of reducing these frictions varies across locations because it depends on three factors that vary locally: preferences, the availability of substitutes, and the availability of complements. Thus, the diffusion of the Internet benefits some locations more than others. The chapter concludes by discussing directions for future research.
Access to the complete content on Oxford Handbooks Online requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.
If you have purchased a print title that contains an access token, please see the token for information about how to register your code.