Network effects on international trade

Empirical findings from the gravity model using a bilateral data set of 23 OECD countries provide strong support for the network effect of FDI, migration, and the Internet on international trade. Further, the findings show differences in the network effect between the manufacturing and service sectors. The Internet is the most important channel for the network effect for both the manufacturing and service sectors, whereas migration is important only for the manufacturing sector. (c) 2012 Elsevier B.V. All rights reserved.