How much do internal firm resources contribute to technology adoption in major urban locations, w... more How much do internal firm resources contribute to technology adoption in major urban locations, where the advantages from agglomeration are greatest? The authors address this question in the context of a business's decision to adopt advanced Internet technology. Drawing on a rich data set of adoption decisions by 86,879 U.S. establishments, the authors find that the marginal contribution of internal
We use data from a large-scale field experiment to explore what influences the effectiveness of o... more We use data from a large-scale field experiment to explore what influences the effectiveness of online advertising. We find that matching an ad to website content and increasing an ad's obtrusiveness independently increase purchase intent. However, in combination, these two strategies are ineffective. Ads that match both website content and are obtrusive do worse at increasing purchase intent than ads
We survey the literature on the adoption and diffusion of information and communication technolog... more We survey the literature on the adoption and diffusion of information and communication technologies (ICT) in businesses. We identify two key dimensions that have been the focus of most of the literature. First, research can be categorized as focusing on ICT adoption costs or ICT adoption benefits. Second, research can be categorized as focusing on how adoption is influenced by
We provide a framework and evidence to confront two contradictory yet common assertions: (1) new ... more We provide a framework and evidence to confront two contradictory yet common assertions: (1) new technology such as the Internet favors businesses in urban areas and (2) the Internet reduces the importance of distance for economic activity. Controlling for other factors, we show that participation in the Internet is more likely in rural areas than in urban areas. This is particularly true for technologies that involve communication across establishments. Nevertheless, talk of the dissolution of cities is premature. Frontier Internet technologies for communication within an establishment appear more often at establishments in urban areas, even with industry controls (JEL classification L63, L86, R0).
We provide a framework and evidence to confront two questions: Does the location of an establishm... more We provide a framework and evidence to confront two questions: Does the location of an establishment shape its adoption of different complex Internet applications even when controlling for an industry's features? If location does matter, what features in an industry shape whether Internet adoption follows a pattern consistent with the urban leadership or global village hypotheses? Our findings show that
Statistical research in electronic commerce has made great advances in recent years. Researchers ... more Statistical research in electronic commerce has made great advances in recent years. Researchers have gained an understanding of how use of consumer electronic markets leads to lower prices (Brynjolfsson and Smith 2000), greater selection for consumers (Brynjolfsson et al. 2003; ...
The authors test opposing theories on how urban locations influenced the diffusion of Internet te... more The authors test opposing theories on how urban locations influenced the diffusion of Internet technology. They find evidence that, controlling for industry, participation in the Internet is more likely in rural areas than in urban areas. Nevertheless, talk of the dissolution of cities is premature. Frontier Internet technologies appear more often at establishments in urban areas, even with industry controls.
Our study provides the first census of the dispersion of Internet technology to commercial establ... more Our study provides the first census of the dispersion of Internet technology to commercial establishments in the United States. We distinguish between participation, that is, use of the Internet because it is necessary for all business (e.g., email and browsing) and enhancement, that is, adoption of Internet technology to enhance computing processes for competitive advantage (e.g., electronic commerce). Employing the
Our study provides the first census of the dispersion of Internet technology to commercial establ... more Our study provides the first census of the dispersion of Internet technology to commercial establishments in the United States. We distinguish between participation, that is, use of the Internet because it is necessary for all business (e.g., email and browsing) and enhancement, that is, adoption of Internet technology to enhance computing processes for competitive advantage (e.g., electronic commerce).
Proceedings of the 5th international conference on Electronic commerce - ICEC '03, 2003
This study offers hard evidence on the geographic dispersion of electronic commerce to businesses... more This study offers hard evidence on the geographic dispersion of electronic commerce to businesses. We test opposing theories on how urban locations influenced the diffusion of Internet technology. Global village theory asserts that Internet technology reduces the importance of distance and reverses the trend to urbanization. Urban density theory predicts that the Internet follows a traditional pattern of diffusion, first to urban areas with complementary technical and knowledge resources. A third theory, industry composition, argues that some of the geographic variation in use is due to the agglomeration of IT-intensive industries.
Overview: It is well documented that the Internet retailing revolution has established a new dist... more Overview: It is well documented that the Internet retailing revolution has established a new distribution channel that represents a fundamental paradigm shift in consumer buying patterns. The rapid growth of alternative retail channels has transformed not only the competitive structure of several industries, but also the way in which consumers shop for products. Despite a wealth of research on electronic commerce, no prior research has measured how geographical location shapes consumer buying behavior in electronic markets. Do consumers in different locations derive different benefits from using the Internet in terms of selection, convenience, and price? This paper proposes a novel framework and data to address these issues. Our empirical strategy addresses an important problem that has been inadequately addressed in statistical e-commerce research: how consumers substitute between online and offline channels. We develop a methodology for understanding online/offline substitution by...
How has innovative and competitive behavior in computing and internet markets evolved over the pa... more How has innovative and competitive behavior in computing and internet markets evolved over the past half century? In the first section of this review, I discuss these questions in light of six topics: the limited role for technology push; the diffusion of general purpose technologies; the organization of proprietary platforms; the presence of asymmetric innovation incentives; the importance of market-oriented learning; and the localization of economic activity. Despite dramatic changes in outcomes, in the predominant product markets, and in the identities of leading sellers, the conditions of market structure shape innovative conduct in firms from one year to the next and, to a large extent, from one decade to the next, in many of the same economic terms. In the second section, I closely examine the U.S. commercial Internet experience in the 1990s. While the peculiar events that led to the invention of the commercial Internet explain some of the salient and unique features of the co...
We survey the literature on the adoption and diffusion of information and communication technolog... more We survey the literature on the adoption and diffusion of information and communication technologies (ICT) in businesses. We identify two key dimensions that have been the focus of most of the literature. First, research can be categorized as focusing on ICT adoption costs or ICT adoption benefits. Second, research can be categorized as focusing on the internal organization of the firm or on the external environment. Major themes are highlighted as are opportunities for future research.
Page 1. The Impact of Location on Consumer Purchases in Electronic Markets 2nd Statistical Challe... more Page 1. The Impact of Location on Consumer Purchases in Electronic Markets 2nd Statistical Challenges in E-Commerce Research Symposium Chris Forman Tepper School of Business Carnegie Mellon University Anindya Ghose Stern School of Business New York University ...
Preliminary, please do not quote. Abstract Gravity in international trade is one of the most robu... more Preliminary, please do not quote. Abstract Gravity in international trade is one of the most robust empirical regularities in economics: countries trade more with closer and larger countries than with the smaller and further away ones. We show evi-dence that this holds in the case of (free) digital goods that are con-sumed over the Internet and therefore have no transportation costs. In particular, we show that American consumers are more likely to visit websites of companies from countries that are physically close than they are to visit websites from countries that are far. Using a rich data set on the web browsing behavior of 2654 Americans and a discrete choice framework, we provide definitive evidence that transportation costs, search costs, policy barriers, contract enforcement costs, legal and regulatory costs, and distribution costs, although possibly impor-tant, cannot account for all the correlation between distance and trade. A 1% increase in distance reduces the likeliho...
This paper constructs a two-country (Home and Foreign) general equilibrium model of Schumpeterian... more This paper constructs a two-country (Home and Foreign) general equilibrium model of Schumpeterian growth without scale effects. The scale effects property is removed by introducing two distinct specifications in the knowledge production function: the permanent effect on growth (PEG) specification, which allows policy effects on long-run growth; and the temporary effects on growth (TEG) specification, which generates semi-endogenous long-run economic growth. In the present model, the direction of the effect of the size of innovations on the pattern of trade and Home’s relative wage depends on the way in which the scale effects property is removed. Under the PEG specification, changes in the size of innovations increase Home’s comparative advantage and its relative wage, while under the TEG specification, an increase in the size of innovations increases Home’s relative wage but with an ambiguous effect on its comparative advantage.
The technological transformation and automation of delivery has revolutionized the advertising in... more The technological transformation and automation of delivery has revolutionized the advertising industry. Increased reliance on technology has also led to requirements for standardization of advertising formats. This paper examines how the memorability of banner advertising changed with the introduction of new standards regularizing the size of display advertising. Using data from randomized field tests, we find evidence that for most ads, recall of banner advertising declines as a result of standardization. The decline is much weaker when a standardized ad is the only ad on the page, and when the ads appear to be more original, so a likely explanation is that standardization makes it harder for basic ads to distinguish themselves from their competition.
How much do internal firm resources contribute to technology adoption in major urban locations, w... more How much do internal firm resources contribute to technology adoption in major urban locations, where the advantages from agglomeration are greatest? The authors address this question in the context of a business's decision to adopt advanced Internet technology. Drawing on a rich data set of adoption decisions by 86,879 U.S. establishments, the authors find that the marginal contribution of internal
We use data from a large-scale field experiment to explore what influences the effectiveness of o... more We use data from a large-scale field experiment to explore what influences the effectiveness of online advertising. We find that matching an ad to website content and increasing an ad's obtrusiveness independently increase purchase intent. However, in combination, these two strategies are ineffective. Ads that match both website content and are obtrusive do worse at increasing purchase intent than ads
We survey the literature on the adoption and diffusion of information and communication technolog... more We survey the literature on the adoption and diffusion of information and communication technologies (ICT) in businesses. We identify two key dimensions that have been the focus of most of the literature. First, research can be categorized as focusing on ICT adoption costs or ICT adoption benefits. Second, research can be categorized as focusing on how adoption is influenced by
We provide a framework and evidence to confront two contradictory yet common assertions: (1) new ... more We provide a framework and evidence to confront two contradictory yet common assertions: (1) new technology such as the Internet favors businesses in urban areas and (2) the Internet reduces the importance of distance for economic activity. Controlling for other factors, we show that participation in the Internet is more likely in rural areas than in urban areas. This is particularly true for technologies that involve communication across establishments. Nevertheless, talk of the dissolution of cities is premature. Frontier Internet technologies for communication within an establishment appear more often at establishments in urban areas, even with industry controls (JEL classification L63, L86, R0).
We provide a framework and evidence to confront two questions: Does the location of an establishm... more We provide a framework and evidence to confront two questions: Does the location of an establishment shape its adoption of different complex Internet applications even when controlling for an industry's features? If location does matter, what features in an industry shape whether Internet adoption follows a pattern consistent with the urban leadership or global village hypotheses? Our findings show that
Statistical research in electronic commerce has made great advances in recent years. Researchers ... more Statistical research in electronic commerce has made great advances in recent years. Researchers have gained an understanding of how use of consumer electronic markets leads to lower prices (Brynjolfsson and Smith 2000), greater selection for consumers (Brynjolfsson et al. 2003; ...
The authors test opposing theories on how urban locations influenced the diffusion of Internet te... more The authors test opposing theories on how urban locations influenced the diffusion of Internet technology. They find evidence that, controlling for industry, participation in the Internet is more likely in rural areas than in urban areas. Nevertheless, talk of the dissolution of cities is premature. Frontier Internet technologies appear more often at establishments in urban areas, even with industry controls.
Our study provides the first census of the dispersion of Internet technology to commercial establ... more Our study provides the first census of the dispersion of Internet technology to commercial establishments in the United States. We distinguish between participation, that is, use of the Internet because it is necessary for all business (e.g., email and browsing) and enhancement, that is, adoption of Internet technology to enhance computing processes for competitive advantage (e.g., electronic commerce). Employing the
Our study provides the first census of the dispersion of Internet technology to commercial establ... more Our study provides the first census of the dispersion of Internet technology to commercial establishments in the United States. We distinguish between participation, that is, use of the Internet because it is necessary for all business (e.g., email and browsing) and enhancement, that is, adoption of Internet technology to enhance computing processes for competitive advantage (e.g., electronic commerce).
Proceedings of the 5th international conference on Electronic commerce - ICEC '03, 2003
This study offers hard evidence on the geographic dispersion of electronic commerce to businesses... more This study offers hard evidence on the geographic dispersion of electronic commerce to businesses. We test opposing theories on how urban locations influenced the diffusion of Internet technology. Global village theory asserts that Internet technology reduces the importance of distance and reverses the trend to urbanization. Urban density theory predicts that the Internet follows a traditional pattern of diffusion, first to urban areas with complementary technical and knowledge resources. A third theory, industry composition, argues that some of the geographic variation in use is due to the agglomeration of IT-intensive industries.
Overview: It is well documented that the Internet retailing revolution has established a new dist... more Overview: It is well documented that the Internet retailing revolution has established a new distribution channel that represents a fundamental paradigm shift in consumer buying patterns. The rapid growth of alternative retail channels has transformed not only the competitive structure of several industries, but also the way in which consumers shop for products. Despite a wealth of research on electronic commerce, no prior research has measured how geographical location shapes consumer buying behavior in electronic markets. Do consumers in different locations derive different benefits from using the Internet in terms of selection, convenience, and price? This paper proposes a novel framework and data to address these issues. Our empirical strategy addresses an important problem that has been inadequately addressed in statistical e-commerce research: how consumers substitute between online and offline channels. We develop a methodology for understanding online/offline substitution by...
How has innovative and competitive behavior in computing and internet markets evolved over the pa... more How has innovative and competitive behavior in computing and internet markets evolved over the past half century? In the first section of this review, I discuss these questions in light of six topics: the limited role for technology push; the diffusion of general purpose technologies; the organization of proprietary platforms; the presence of asymmetric innovation incentives; the importance of market-oriented learning; and the localization of economic activity. Despite dramatic changes in outcomes, in the predominant product markets, and in the identities of leading sellers, the conditions of market structure shape innovative conduct in firms from one year to the next and, to a large extent, from one decade to the next, in many of the same economic terms. In the second section, I closely examine the U.S. commercial Internet experience in the 1990s. While the peculiar events that led to the invention of the commercial Internet explain some of the salient and unique features of the co...
We survey the literature on the adoption and diffusion of information and communication technolog... more We survey the literature on the adoption and diffusion of information and communication technologies (ICT) in businesses. We identify two key dimensions that have been the focus of most of the literature. First, research can be categorized as focusing on ICT adoption costs or ICT adoption benefits. Second, research can be categorized as focusing on the internal organization of the firm or on the external environment. Major themes are highlighted as are opportunities for future research.
Page 1. The Impact of Location on Consumer Purchases in Electronic Markets 2nd Statistical Challe... more Page 1. The Impact of Location on Consumer Purchases in Electronic Markets 2nd Statistical Challenges in E-Commerce Research Symposium Chris Forman Tepper School of Business Carnegie Mellon University Anindya Ghose Stern School of Business New York University ...
Preliminary, please do not quote. Abstract Gravity in international trade is one of the most robu... more Preliminary, please do not quote. Abstract Gravity in international trade is one of the most robust empirical regularities in economics: countries trade more with closer and larger countries than with the smaller and further away ones. We show evi-dence that this holds in the case of (free) digital goods that are con-sumed over the Internet and therefore have no transportation costs. In particular, we show that American consumers are more likely to visit websites of companies from countries that are physically close than they are to visit websites from countries that are far. Using a rich data set on the web browsing behavior of 2654 Americans and a discrete choice framework, we provide definitive evidence that transportation costs, search costs, policy barriers, contract enforcement costs, legal and regulatory costs, and distribution costs, although possibly impor-tant, cannot account for all the correlation between distance and trade. A 1% increase in distance reduces the likeliho...
This paper constructs a two-country (Home and Foreign) general equilibrium model of Schumpeterian... more This paper constructs a two-country (Home and Foreign) general equilibrium model of Schumpeterian growth without scale effects. The scale effects property is removed by introducing two distinct specifications in the knowledge production function: the permanent effect on growth (PEG) specification, which allows policy effects on long-run growth; and the temporary effects on growth (TEG) specification, which generates semi-endogenous long-run economic growth. In the present model, the direction of the effect of the size of innovations on the pattern of trade and Home’s relative wage depends on the way in which the scale effects property is removed. Under the PEG specification, changes in the size of innovations increase Home’s comparative advantage and its relative wage, while under the TEG specification, an increase in the size of innovations increases Home’s relative wage but with an ambiguous effect on its comparative advantage.
The technological transformation and automation of delivery has revolutionized the advertising in... more The technological transformation and automation of delivery has revolutionized the advertising industry. Increased reliance on technology has also led to requirements for standardization of advertising formats. This paper examines how the memorability of banner advertising changed with the introduction of new standards regularizing the size of display advertising. Using data from randomized field tests, we find evidence that for most ads, recall of banner advertising declines as a result of standardization. The decline is much weaker when a standardized ad is the only ad on the page, and when the ads appear to be more original, so a likely explanation is that standardization makes it harder for basic ads to distinguish themselves from their competition.
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