Online Commerce, Inter-Regional Retail Trade, and the Evolution of Gravity Effects: Evidence from 20 Billion Transactions

This paper investigates interregional retail trade linkages, and changes in the gravity effects between cities and regions arising from online commerce, as opposed to traditional point-of-sale commerce. We build original interregional retail trade measures from nearly 20 billion domestic consumer online and in-store transactions made through bank cards, in France 2018-19. We are able to study the mobility of individual bank card holders throughout France, their on-site purchases, and also the locations from which their online purchases were made. We find evidence that online consumer expenditure tends to be more heavily concentrated in the already-large regional economies. This result suggests that the increasing movement toward online purchasing may tend to increase the concentration of overall economic activity, and may have important implications for regional economic development.