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Information and communications technology (ICT) and services trade

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  • Nath, Hiranya K.
  • Liu, Lirong

Abstract

Using panel data for 49 countries from 2000 to 2013, this paper empirically examines the impacts of ICT development on exports, imports, and total trade of ten service items. Unlike most previous studies, seven different ICT variables are used to construct a comprehensive ICT development index (IDI) that captures the access, use, and skill aspects of the technology. The results indicate that ICT development has significant positive contributions to the growth of international trade in seven (of ten) service items. For two of these – financial and other business services – both exports and imports are significantly impacted by ICT. It also has significant positive effects only on exports of transportation services and only on imports of insurance services, royalty and license fees, telecommunication services, and travel. Five of these services are ICT-enabled: this technology plays an important role in the production and delivery of these services. When we consider total (exports plus imports) trade, ICT has significant positive effects on six of the items, including financial services, insurance services, other business services, royalty and license fees, transportation and travel. Among the three aspects, ICT use is found to be more important than access and skills for trade in a number of services. These results provide interesting policy insights for ICT development and growth of services trade.

Suggested Citation

  • Nath, Hiranya K. & Liu, Lirong, 2017. "Information and communications technology (ICT) and services trade," Information Economics and Policy, Elsevier, vol. 41(C), pages 81-87.
    • Handle: RePEc:eee:iepoli:v:41:y:2017:i:c:p:81-87
    DOI: 10.1016/j.infoecopol.2017.06.003
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    11. Rubínová, Stela & Sebti, Mehdi, 2021. "The WTO Global Trade Costs Index and its determinants," WTO Staff Working Papers ERSD-2021-6, World Trade Organization (WTO), Economic Research and Statistics Division.
    12. Adusei Poku, Eugene & Broni-Pinkrah, Samuel & Effah Nyamekye, Gabriel, 2016. "Modelling and assessment of the effect of income on service exports in Ghana," MPRA Paper 72312, University Library of Munich, Germany.
    13. Hildegunn Kyvik Nordås, 2021. "Editorial," Foreign Trade Review, , vol. 56(3), pages 235-237, August.
    14. Aneesha Chitgupi, 2019. "Macroeconomic determinants of software services exports and impact on external stabilisation for India: An empirical analysis," Working Papers 432, Institute for Social and Economic Change, Bangalore.
    15. Lianyue Feng & Helian Xu & Gang Wu & Wenting Zhang, 2021. "Service trade network structure and its determinants in the Belt and Road based on the temporal exponential random graph model," Pacific Economic Review, Wiley Blackwell, vol. 26(5), pages 617-650, December.
    16. Nechifor, Victor & Boysen, Ole & Ferrari, Emanuele & Simola, Antti & Wafula, Martin & Laichena, Joshua & Malot, Kenneth, 2021. "The AfCFTA at a country level: trade liberalization in Kenya," Conference papers 333308, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    17. Burcu Ozcan & Hiranya Nath, 2016. "Information and Communication Technology (ICT) and International Trade: Evidence from Turkey," Working Papers 1609, Sam Houston State University, Department of Economics and International Business.
    18. Zi Hui Yin & Chang Hwan Choi, 2023. "The effects of China’s cross-border e-commerce on its exports: a comparative analysis of goods and services trade," Electronic Commerce Research, Springer, vol. 23(1), pages 443-474, March.
    19. Ziyu Yi & Long Wei & Xuan Huang, 2022. "Does Information-and-Communication-Technology Market Openness Promote Digital Service Exports?," Sustainability, MDPI, vol. 14(9), pages 1-19, April.
    20. Nakano, Satoshi & Washizu, Ayu, 2018. "Induced effects of smart food/agri-systems in Japan: Towards a structural analysis of information technology," Telecommunications Policy, Elsevier, vol. 42(10), pages 824-835.
    21. Mahdi Ghodsi, 2023. "Regulatory Convergence within Technical Barriers to Trade," wiiw Working Papers 229, The Vienna Institute for International Economic Studies, wiiw.
    22. Dolores Añon Higón & Juan A. Daniel Bonvin, 2023. "Do digitalization spurs SMEs’ participation in foreign markets?," Working Papers 2307, Department of Applied Economics II, Universidad de Valencia.
    23. Mahdi Ghodsi, 2021. "Impact of Technical Barriers to Trade on the Trade in Goods in the Information and Communications Technology Sector: Differentiating by Aim of the Regulatory Measure," wiiw Working Papers 208, The Vienna Institute for International Economic Studies, wiiw.
    24. Awad, Atif & Albaity, Mohamed, 2022. "ICT and economic growth in Sub-Saharan Africa: Transmission channels and effects," Telecommunications Policy, Elsevier, vol. 46(8).

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    More about this item

    Keywords

    Information and communications technology (ICT); Services exports; Services imports; Service trade; ICT-enabled services;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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