The Effect of ICT on Trade: Does Product Complexity Matter?
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TitleThe Effect of ICT on Trade: Does Product Complexity Matter?
We use a gravity model of trade to investigate the effect of internet use on aggregate trade flows. We apply a structural gravity model using up-to-date PPML estimation techniques to a sample of bilateral exports ... [+]
We use a gravity model of trade to investigate the effect of internet use on aggregate trade flows. We apply a structural gravity model using up-to-date PPML estimation techniques to a sample of bilateral exports of 120 countries over the period 2000–2014. In contrast to previous studies, we segment countries according to their degree of product complexity and estimate the model for each segment. The results show that internet use increases trade, and the segmentation by product complexity is more sensitive to internet use than segmenting by level of income. The main results also indicate that countries trade more if similar levels of ICT use are coupled with similar degrees of product complexity in the trading countries. [-]
Investigation projectWe would like to thank two anonymous referees for their valuable comments and suggestions. Financial support received from the project ECO2014-58991-C3-2-R (AEI, FEDER, EU) is also gratefully acknowledged.
Bibliographic citationRODRÍGUEZ-CRESPO, Ernesto; MARTÍNEZ-ZARZOSO, Inmaculada. The effect of ICT on trade: Does product complexity matter?. Telematics and Informatics, 2019, vol. 41, p.182-196
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