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Information and Communications Technology (ICT) and Services Trade

Author

Listed:
  • Lirong Liu

    () (Department of Economics and Finance, Texas A&M University - Commerce)

  • Hiranya Nath

    () (Department of Economics and International Business, Sam Houston State University)

Abstract

Using panel data for 49 countries from 2000 to 2013, this paper empirically examines the impacts of ICT on exports and imports of ten service categories. 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 overall ICT development has significant positive impacts on the exports of 'other business services' and 'transportation services' and the imports of 'insurance services', 'telecommunication services', and 'travel services'. This result is robust under different estimation methods. Among the three ICT components, ICT use is found to be more important than access and skills for trade in a number of services. Furthermore, when the models are estimated separately for advanced economics (AEs) and emerging market economies (EMEs), ICT development appears to be more important for exports from AEs and for imports by EMEs. Finally, ICT use is more important in EMEs than in AEs, particularly for imports. These results provide important policy insights for ICT development and growth of services trade.

Suggested Citation

  • 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.
  • Handle: RePEc:shs:wpaper:1601
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    File URL: http://www.shsu.edu/academics/economics-and-international-business/documents/wp_series/wp16-01_paper.pdf
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    References listed on IDEAS

    as
    1. Freund, Caroline L. & Weinhold, Diana, 2004. "The effect of the Internet on international trade," Journal of International Economics, Elsevier, vol. 62(1), pages 171-189, January.
    2. Uday M. Apte & Hiranya K. Nath, 2012. "U.S. Trade In Information-Intensive Services," World Scientific Book Chapters,in: The UCLA Anderson Business and Information Technologies (BIT) Project A Global Study of Business Practice (2012), chapter 6, pages 117-144 World Scientific Publishing Co. Pte. Ltd..
    3. Fink, Carsten & Mattoo, Aaditya & Neagu, Ileana Cristina, 2005. "Assessing the impact of communication costs on international trade," Journal of International Economics, Elsevier, vol. 67(2), pages 428-445, December.
    4. Susanto Basu & John G. Fernald, 2008. "Information and communications technology as a general purpose technology: evidence from U.S. industry data," Economic Review, Federal Reserve Bank of San Francisco, pages 1-15.
    5. Hiranya K. Nath & Lirong Liu, 2012. "Information and Communications Technology (ICT) and Trade in Emerging Market Economies," Working Papers 1205, Sam Houston State University, Department of Economics and International Business.
    6. Caroline Freund & Diana Weinhold, 2002. "The Internet and International Trade in Services," American Economic Review, American Economic Association, vol. 92(2), pages 236-240, May.
    7. Choi, Changkyu, 2010. "The effect of the Internet on service trade," Economics Letters, Elsevier, vol. 109(2), pages 102-104, November.
    8. Svaleryd, Helena & Vlachos, Jonas, 2005. "Financial markets, the pattern of industrial specialization and comparative advantage: Evidence from OECD countries," European Economic Review, Elsevier, vol. 49(1), pages 113-144, January.
    9. George R. G. Clarke & Scott J. Wallsten, 2006. "Has the Internet Increased Trade? Developed and Developing Country Evidence," Economic Inquiry, Western Economic Association International, vol. 44(3), pages 465-484, July.
    10. 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.
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    Citations

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    Cited by:

    1. 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.
    2. 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.

    More about this item

    Keywords

    Information and Communication Technology (ICT); Advanced Economy (AE); Emerging Market Economy (EME); Services Exports; Services Imports; ICT Development Index (IDI); ICT Access; ICT Use; ICT Skills;

    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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