Data and Code for: Information Frictions, Internet and the Relationship between Distance and Trade

Abstract: We examine how the adoption of information communicationtechnology affects bilateral trade. The context is a public programin Norway which rolled out broadband access points leading to plausiblyexogenous variation in the availability and adoption of broadbandby firms. We find that broadband makes trade patterns more sensitiveto distance and economic size. These results are consistent with amodel of trade with variable elasticity of demand. The model predictsthat adoption of a technology that lowers information frictions enlargesthe choice set of exporters and importers. This makes demand moreelastic with respect to trade costs and thus distance.