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Goods Follow Bytes: The Impact of ICT on EU Trade

Author

Listed:
  • Anselm Mattes
  • Philipp Meinen
  • Ferdinand Pavel

Abstract

This paper empirically assesses whether the deployment and use of Information and Communication Technology (ICT) infrastructure at the national level affects trade flows within the European Union (EU) and between the EU and its main trading partners. The analysis tests the hypothesis that availability and use of ICT enhances trade by reducing transaction costs and through network effects that materialize when both trading partners are advanced users of ICT. The empirical analysis is based on the application of gravity equations in various robust specifications. The results suggest that ICT does have a significant impact on EU trade. In particular, we find trade to be enhanced if both trading partners reveal advanced ICT endowments, which supports the expected network effects. Additionally, we observe trade diversion effects from less to highly ICT developed countries.

Suggested Citation

  • Anselm Mattes & Philipp Meinen & Ferdinand Pavel, 2012. "Goods Follow Bytes: The Impact of ICT on EU Trade," Discussion Papers of DIW Berlin 1182, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1182
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jonathan Timmis, "undated". "The Internet and International Trade in Goods," Discussion Papers 12/08, University of Nottingham, GEP.
    2. Lirong Liu & Hiranya Nath, 2016. "Information and Communications Technology (ICT) and Services Trade," Working Papers 1601, Sam Houston State University, Department of Economics and International Business.
    3. Evgeniya Yushkova, 2014. "Impact of ICT on trade in different technology groups: analysis and implications," International Economics and Economic Policy, Springer, vol. 11(1), pages 165-177, February.
    4. Jonathan Timmis, "undated". "The Internet and International Trade in Goods," Discussion Papers 12/03, University of Nottingham, School of Economics.

    More about this item

    Keywords

    Exports; ICT; gravity model; international trade; network effects;

    JEL classification:

    • F1 - International Economics - - Trade
    • D2 - Microeconomics - - Production and Organizations

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