Abstract:
I develop new measures of Internet communication costs that hold advantages over similar measures previously used in the economics literature: they are more solidly based on the technical nature of the Internet, easier to compute, and/or more suitable to use in international economics. To do this, I introduce a pair of novel data sources that describe distinct aspects of Internet communication. I further demonstrate that my developed measures possess explanatory power when used to explain patterns of trade in goods and in services, as well as cross-border portfolio investment.