The Impact of Information and Communication Technology (ICT) on ASEAN Trade Flow

Abstract

Information and communications technology (ICT) would drive the acceleration of digitalization era, including dynamics of trade flow among ASEAN countries, both in low or high-tech also. Basically each country has different resources, and so why many factors must be known to be a winner. This aim of study was to analyze the impact of ICT existence on ASEAN trade flows. Panel data for 10 ASEAN countries for a period from 2012 to 2016 was employed to construct Gravity Model. To estimate that model, we applied Poisson Pseudo Maximum Likelihood (PPML). All data came from World Bank, WITS, CEPII, IMF, and ITU. The result showed that ICT has significantly positive impacts on both trade flow ASEAN market. If we elaborated in detail, according to (a) the sector, ICT in trade of hi-tech commodities was more attractive effort than low-tech commodities and (b) the existence, the adult literacy rate as ICT skills was more dominant factor influenced in trade flow among ASEAN countries compare ICT access and usage. Some policy recommendations were how to develop workers' skills, mitigation issue on digital economy, and develop domestic ICT industry.

Strategy for Increasing Exports Through ICT Development and Potential Market Mapping: Case Study of Indonesia Labor Intensive Industries

“…The GMM estimated coefficient is said to be valid if it has tested the validity of the instrument which can be carried out by carrying out the Sargan test and is free from auto-correlation at least at the second-order level (Baltagi, 2008). several studies use the GMM technique as their robustness test (Hermawan et al, 2019;Purwono et al, 2022;Rodriguez-Crespo et al, 2021;Sugiharti et al, 2020).…”

“…Furthermore, this study tries to accommodate other important factors in international trade, namely FTAs. The Free Trade Agreement is an agreement between several countries that is expected to increase international trade flows (Hermawan et al, 2019). The existence of trade agreements between countries is another form of globalization that carries the borderless concept between countries.…”