Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/202190 
Year of Publication: 
2013
Series/Report no.: 
Institute for Prospective Technological Studies Digital Economy Working Paper No. 2013/08
Publisher: 
European Commission, Joint Research Centre (JRC), Seville
Abstract: 
An important EU Digital Single Market policy objective is to achieve an open and integrated market for online e-commerce in the EU, to make it easy for consumers to go outside their domestic market and shop online in other EU Member States. This study applies a standard gravity model of international trade to Google e-commerce data to estimate the prevalence of home bias in online shopping in the EU. It compares how much EU Member States trade domestically and with other Member States, and how much the EU trades with itself and with the rest of the world. The research confirms the findings of the (offline) international trade literature, according to which there is strong home bias. There is no unambiguous evidence about the strengths or weaknesses of the EU Digital Single Market. Strong intra-EU home bias suggests that online consumers have a tendency to stay in their home country market. Equally strong extra-EU home bias suggests that online consumers who do decide to shop abroad have a tendency to stay in the EU however, rather than going to a non-EU country. There are indications that online home bias is lower in a comparable cross-border trade setting in North America. Data and methodological limitations do not allow a more detailed analysis.
Subjects: 
online trade
e-commerce
gravity
barriers to trade
home bias
JEL: 
F15
O52
Persistent Identifier of the first edition: 
ISBN: 
978-92-79-33677-5
Document Type: 
Working Paper

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