RIEB Discussion Paper Series No.2021-10

Title

Do ICT Development and Technology Use Decrease the Demand for Business Travel?

Abstract

The evolution of information and communication technologies (ICT) has altered business operations and communications. We examine the differences in the business trips between internet-savvy and non-internet-savvy and find heterogeneous impacts of internet usage on business travel behavior by occupation and by timing. On the one hand, ICT has substitution effects on business travel. As the internet spread to the society between 2001 and 2017, U.S. business travel has significantly decreased. The substitution effect is more substantial for professionals; for instance, internet-savvy professionals traveled a significantly shorter distance than non-savvy counterparts in 2009. On the other hand, ICT also has complementary effects on business travel. The decrease in business travel is smaller for internet-savvy sales and service workers than non-savvy counterparts. By 2017, internet-savvy sales and service workers travel significantly more often and longer distances than their non-savvy counterparts. As the post-crisis consequence of COVID-19 might take years to revive business activities, the results are essential for predicting and understanding the impact of further digital transformation during and after the pandemic.

Keywords

Business travel; ICT development; (Non)internet-savvy

JEL Classification

Inquiries

Hristina GAYDARSKA
Research Institute for Economics and Business Administration,
Kobe University

Miwa MATSUO
Research Institute for Economics and Business Administration,
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059