ICTs quality and quantity and the margins of trade

Ana Lucia Abeliansky, Javier Barbero and Ernesto Rodriguez-Crespo

Telecommunications Policy, 2021, vol. 45, issue 1

Abstract: Given the importance of the fixed costs of exporting, we investigate how information and communication technologies (ICTs) relate to the extensive and intensive margin of trade (the fraction of products that are exported and the market share, respectively). We use a novel dataset on the quantity and quality of ICTs, namely the number of subscriptions (per capita) and the average quality of subscriptions (bandwidth). To test this relationship, we use an augmented Gravity Model of Trade with ICTs using panel data and controlling for multilateral resistance. Regression results for 150 countries over 1995–2014 provide robust evidence that ICTs matter for the extensive margin of trade. The evidence is even stronger for developing countries in terms of quality. Although the number of subscriptions matters for the extensive margin, the quality matters even more. While having a device helps producers and consumers access world markets, how much information these devices can share and how stable connections are also matter.

Keywords: Gravity equation; Information and communication technology; Trade margins (search for similar items in EconPapers)
JEL-codes: F14 F29 L96 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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DOI: 10.1016/j.telpol.2020.102056

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