Information and communications technology (ICT) and services trade

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.

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