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Forecasting ICT-Driven Trade Competitiveness 2024-2028: A Cluster and Scenario Analysis

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  • Elias Aravantinos

Abstract

This study introduces the Digital Competitiveness Index for Trade (DCIT), a composite metric integrating ICT readiness, broadband adoption, GDP per capita, foreign direct investment, government effectiveness, and trade volume to assess countries' digital trade competitiveness. The index captures the enabling conditions -- ICT innovation capacity, broadband diffusion, investment intensity, and macroeconomic fundamentals - that shape a nation's ability to participate in digital trade. Sensitivity analysis demonstrates strong robustness: adjusting ICT-FDI weights alters DCIT outcomes by only 26%, with near perfect linearity (R^2 = 0.9996). Predictive validation shows that DCIT is a strong explainer of trade connectivity growth (R^2 = 0.67) but a modest predictor of GDP expansion. Scenario simulations reveal that combined ICT and FDI acceleration consistently outperforms single-lever strategies, with gains increasing by cluster maturity (up to 10% in advanced clusters). High-growth scenarios generate a 50-60% uplift in competitiveness for mid-tier and advanced clusters, underscoring the importance of integrated digital investment strategies.

Suggested Citation

  • Elias Aravantinos, 2025. "Forecasting ICT-Driven Trade Competitiveness 2024-2028: A Cluster and Scenario Analysis," Papers 2601.00842, arXiv.org.
    • Handle: RePEc:arx:papers:2601.00842
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    References listed on IDEAS

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    1. Aravantinos, Elias & Varoutas, Dimitris, 2025. "Clustering Emerging Economies by Broadband Diffusion Trajectories," 33rd European Regional ITS Conference, Edinburgh, 2025: Digital innovation and transformation in uncertain times 331250, International Telecommunications Society (ITS).
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    4. Valverde-Carbonell, Jorge, 2025. "Rethinking the literature on economic complexity indexes," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 123-145.
    5. Jinke Li & Fang Wang, 2024. "A Study on the Competitiveness and Influencing Factors of the Digital Service Trade," Sustainability, MDPI, vol. 16(8), pages 1-21, April.
    6. Zhou, Fengxiu & Wen, Huwei & Lee, Chien-Chiang, 2022. "Broadband infrastructure and export growth," Telecommunications Policy, Elsevier, vol. 46(5).
    7. Wang, Wencheng & Ning, Zinan & Shu, Yang & Riti, Miriam-Kamah J. & Riti, Joshua Sunday, 2023. "ICT interaction with trade, FDI and financial inclusion on inclusive growth in top African nations ranked by ICT development," Telecommunications Policy, Elsevier, vol. 47(4).
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