The Impact of Ict on Service Trade

Abstract

While trade in goods has been investigated extensively over decades, studies on trade in services are relatively new. In this paper, we investigate the impacts of information and communication technology (ICT) on trade in services. We measured ICT by four dimensions, including the subscriptions to broadband, fixed telephones, mobile phones and Internet. Our sample covered more than 200 countries from 2005 to 2015. We employed the modified gravity model and found that all four dimensions had significant impacts on the expansion trade in services, but mobile subscriptions are the most consistent dimensions. Finally, the effects of ICT in exporting and importing countries are similar.

Determinants of Service Export in ASEAN Member Countries

“…However, the variables of foreign direct investment, real exchange rate, communication facilities, real exchange rate, and gross domestic product were found to have a significant impact on trade in services exports. [13] measured the influence of ICT on the services trade of world countries and found that the dimensions of ICT with the variables of broadband subscriptions, internet users, fixed telephone subscriptions and cellular telephones had a positive effect on the value of services trade. An increase in population and gross domestic product will increase the value of trade in services.…”

“…[10] use GDP per capita and find that GDP per capita affects service exports positively. Real gross domestic product is also widely used in research and it is found that GDP has a positive influence on service exports [8][11] [13]. The GDP used in this study is a constant GDP with a base year 2010 (real GDP) in billions US dollars.…”

“…If the number of workers involved in the company increases, the total production will increase [19]. The population and the productive age population are widely used as variables that indicate a measure of the availability of labor, especially in the service sector and are stated to have a positive influence on service exports [8][10] [13]. The labor force is represented by the labor force participation rate.…”

“…The development of the internet, ICT facilities and others makes the provision of services to the average consumer more possible [1]. [13] state that the dimensions of information and communication have a positive influence on trade in services. ICTs have a large spillover effect on services and serve as a catalyst in converting non-tradable services into tradable services [14].…”

“…Communication facilities in the form of the internet have an important and positive influence on the global economy, especially trade in services [8]. [13] use four dimensions of information and communication technology, namely the number of fixed telephone subscriptions, mobile phone subscriptions, broadband, and internet users. Of the four dimensions, the number of mobile phone subscriptions is the most consistent dimension.…”