The purpose of this paper is to provide an adaptedz gravity model to measure the impact of the number of the internet users on food industry trade between developed Organisation for Economic Cooperation and Development countries using both panel and cross‐sectional data.
The impact of the internet users on food industry export growth and levels, and on food industry trade reorientation, and whether the internet has altered the effect of distance on food industry trade, are analyzed using adapted gravity model.
The positive, significant and over time increasing effect of the internet on food industry exports confirm that the internet reduces market‐specific entry costs for food industry exports. The significant positive effect pertained to the internet is found in the importing countries. The significant positive effects on food industry exports are found for the country's economic size and bilateral common features and proximities. The internet mitigates the countries proximities, but increased the distance between the countries.
The empirical contribution to the research of new connections made with the key elements of trade theory with focus on the effect of the internet on food industry trade.
