Dynamics of ICT Penetration and Trade: Evidence from Major Trading Nations

Areej Siddiqui and Parul Singh ()
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Parul Singh: Indian Institute of Foreign Trade

Chapter Chapter 6 in Trade, Investment and Economic Growth, 2021, pp 91-106 from Springer

Abstract: Abstract The study builds an ICT penetration index and examines the linkage between ICT penetration and exports, imports, and trade openness for major trading nations from 2001 to 2018. Principal component analysis has been used to create the ICT penetration index for the key trading nations. The index created is based on the Internet usage, trade of ICT goods and services, mobile and broadband subscriptions. Few other control variables like financial development index, domestic investment, foreign direct investment, exchange rate and growth are also studied to assess the linkage between ICT penetration and trade in conjunction with cross-country effects. It is observed that there is a linkage between ICT penetration, exports, imports and trade openness for the chosen countries. It is seen that developing and high-income countries exhibit positive relationship between ICT penetration and exports as well as imports, while with respect to trade openness, the role of developing nations is seen to be positive. Thus, the present chapter indicates that development in ICT is crucial for enhancing trade whether exports or imports, and thus, nations should focus on developing policies focusing on improvements in ICT as well as enhancing its reach across geographies and sectors.

Keywords: ICT penetration; ICT index; Exports; Imports; Trade openness; PCA (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-33-6973-3_6

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DOI: 10.1007/978-981-33-6973-3_6

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