Revisiting the Leontief Paradox in the Digital Era: Technological Specialization and Sustainable Development of Digital Service Trade

Lin Zhang, Siyuan Chen () and Ei Thinzar Min ()
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Lin Zhang: School of Economics, Guangxi University, Nanning 530000, China
Siyuan Chen: School of Economics, Guangxi University, Nanning 530000, China
Ei Thinzar Min: School of Economics, Guangxi University, Nanning 530000, China

Sustainability, 2025, vol. 17, issue 15, 1-24

Abstract: To address the new challenges of sustainable international trade under the digital transformation, this study aims to explore the relevance and mechanism of the relationship between technological specialization and the sustainable development of digital service trade (focusing on economic sustainability). Based on panel data from 50 economies from 2006 to 2022, the core hypothesis of “whether technological specialization can enhance the sustainable competitiveness of digital service trade by optimizing the global value chain and industrial structure” is verified. An improved index of technological specialization is proposed, breaking through the limitations of traditional indicators, and for the first time introducing the dimension of “knowledge breadth,” reinterpreting the “Leontief Paradox” in the context of digital trade. The study finds that technological specialization significantly enhances the export of digital services, and the effect is more significant in countries with strict intellectual property protection, latecomers in technology, and the European region. Mechanically, this is achieved through improving the position in the global value chain and upgrading the industrial structure. This provides a theoretical breakthrough to solve the technology–trade paradox in the digital age and offers a path for latecomer economies to reconstruct competitive advantages and achieve sustainable development through technological specialization.

Keywords: digital service trade; global value chain; industrial structure sophistication new Leontief Paradox; technological specialization (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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