File Sharing and International Sales of Copyrighted Music: An Empirical Analysis with a Panel of Countries

Global music sales have substantially fallen in the last four years. This paper uses a panel of country-level data to investigate the extent to which this is a consequence of file sharing. I find that countries with higher internet and broadband penetration have suffered higher drops in music sales, suggesting that music downloads may explain at least part of the recent reduction in sales. I also find some evidence that file sharing may explain a change in the composition of sales by types of repertoires, with a higher reduction of sales of types of music that are being shared more heavily.