Abstract
We use data from PayPal to study the geography of online payment activity. An empirical gravity model finds a distance elasticity of −0.58 for payment value, a result that is 40% lower than typically observed in conventional trade data. The firm-extensive margin is approximately half as sensitive to distance. The link between the scale of merchants' exports and transaction distance is considerably weaker than observed in conventional international trade data. Zipf's Law holds for PayPal merchants in some countries, but fails in smaller PayPal markets. Merchants' account ages only marginally affect the scale and average distance of their export sales.
Date of this Version
6-21-2023
Recommended Citation
Hillberry, Russell; Mahlstein, Kornel; and Schropp, Simon, "The geography of payment activity on PayPal" (2023). Department of Agricultural Economics Faculty Publications. Paper 92.
https://docs.lib.purdue.edu/agedocs/92
Comments
This is the publisher PDF of Hillberry, R., Mahlstein, K., & Schropp, S. (2023). The geography of payment activity on PayPal. Rev Int Econ, 31(5), 1688–1718. Published CC-BY, the version of record and ADA Title II compliant version is available in HTML at DOI: https://doi.org/10.1111/roie.12683