Adoption of the internet by commercial establishments: urban density, global village and industry composition

Authors:
Chris Forman;Avi Goldfarb;Shane Greenstein
Affiliations:
Carnegie Mellon University, Pittsburgh, PA;University of Toronto, Toronto, Canada;Northwestern University, Evanston, IL
Venue:
ICEC '03 Proceedings of the 5th international conference on Electronic commerce
Year:
2003

Citing 1
Cited 1

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Journal of Electronic Commerce in Organizations

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Abstract

Until now, two opposing views have been argued on the relationship between Internet technology and economic agglomeration. One view, which we term global village theory, asserts that Internet technology helps lower communication costs and break down geographic boundaries between firms. The other view, labeled urban density theory, argues that the Internet follows a traditional pattern of diffusion-diffusing first through urban areas with complementary technical and knowledge resources that lower the costs of investing in new frontier technology. We offer hard evidence on factors influencing the dispersion of Internet technology to businesses. We find no evidence for urban density theory in the diffusion of basic access and participation in the Internet network. We do find some evidence supporting global village theory for diffusion along this dimension. We also find that the pattern of adoption of frontier Internet technologies supports urban density theory not global village theory.