I researched about the pros and cons of absolute and relative internal linking and this is what I have understood from whatever I have read:

From an SEO perspective, it does not really matter whether we use absolute or relative internal links. A search engine’s visibility or the ranking for a page is not affected by an internal link showing the complete target path, say “www.domain.com/page.html” or simply a relative path, say “/page.html”. The reason for this being that search engines convert relative links into absolute links automatically.

However , I shall enlist a few advantages of using either of the two options:

Points In Favor Of Absolute Internal Linking

- Suppose an external page links to your website using “domain.com” instead of “www.domain.com”. In that case, there is the possibility of a spider following that link and then indexing pages of the website as “domain.com/page.html” instead of “www.domain.com/page.html”. Now, for some reason if the search engine decides that it indexes your pages for “domain.com” and not with “www.domain.com”, in that case, you could suddenly lose rankings for all the keywords for “www.domain.com”. This case is highly circumstantial and chances of the search engines behaving in the way described above is almost negligible.

- Another circumstantial case is when someone downloads a copy of your entire website content and puts it up on his/her domain. If the person assumes that the internal linking is relative, he/she will not bother to change the internal link target paths, whereas if the internal links are absolute links, they shall still be linking to pages on your website and using webstats, you can actually get to know whether your content is being copied or not.

- A very valid point in favor of absolute links is when one is trying to optimize a PDF file. Generally, people download a PDF file onto their desktop and also e-mail them. It is very important to know that spiders crawl links in a PDF file too. Now, suppose you have to downloaded a PDF file onto your desktop. If the internal link in the content is relative, then the page shall not be loaded. Of course, spiders do not download PDF files but still, using relative internal linking hampers the usability factor in this case.

Points In Favor Of Relative Internal Linking

- There is only one critical point in favor of relative internal links, better usability. A shorter code means lesser download time and the page being displayed faster. Target pages from absolute links take more time to load and hence, from a usability point of view, it is a huge disadvantage. Spiders are not affected by download times but humans are. If a page takes too long to download, you’ll simply hit the cancel button and this can be a major problem for conversions.

Overall, it is pretty obvious that relative internal linking would be the preferred option for an SEO campaign because of its usability advantage.