Effect of the Internet on Services Export Diversification

Abstract

The economic effects of information and communication technology (ICT), and particularly the access and use of the Internet (henceforth referred to as "the Internet"), has become the focus of policymakers, researchers, and scholars. Specifically, the development of the services sector due to, among other things, the rapid development of ICT and the Internet, has led economists to recognize the tradability of services, which were long considered a residual and nontradable sector of the economy. This has led to research on the impact of ICT, including the impact of the Internet on trade in services in particular, and on trade performance in general. The rapid development of the services sector is exemplified by statistics. For example, World Trade Organization (WTO) (2019a) reported that in 2018, the volume of world trade in commercial

Effect of Productive Capacities on Economic Complexity: Do Aid for Trade flows Matter?

“…As noted above, human capital development contributes to determining the type of goods (and services) that a country can export (e.g., Hausman et al, 2007). This argument is supported by many empirical studies on the macroeconomic determinants of export product diversi cation (e.g., Agosin et al, 2012;Giri et al, 2019;Gnangnon, 2019Gnangnon, , 2020aGnangnon and Roberts, 2017;Osakwe et al, 2018;Zhu and Fu, 2013). For example, countries endowed with low-skilled workers are likely to export goods and services that are intensive in low-skilled human resources, while countries with highly developed skills could export highly sophisticated goods (and services).…”

“…Relying on previous studies on the determinants of economic complexity (e.g., Chu, 2020;Lapatinas, 2019) and taking cue from previous works concerning the macroeconomic determinants of export product upgrading (e.g., Agosin et al, 2012;Giri et al, 2019;Gnangnon, 2019Gnangnon, , 2020aGnangnon and Roberts, 2017;Osakwe et al, 2018;Zhu and Fu, 2013), we use the well-known two-step system Generalized Methods of Moments (GMM) estimator (see Arellano andBover, 1995 andBlundell andBond, 1998) to perform the empirical exercise. This estimator, which is suitable for dynamics panel datasets featured by a large cross-section and a small-time dimension, allows handling endogeneity problems arising from the correlation between the lagged dependent variable and unobserved time invariant individual countries' effects.…”

“…Sepehrdoust et al (2019) have noted the critical role of infrastructure in promoting economic sophistication. Moreover, a number of empirical studies [9] have pointed out that greater access to the ICTs, notably the Internet contributes to enhance trade ows, and promotes both export product diversi cation (e.g., Visser, 2019) and services export diversi cation (e.g., Gnangnon, 2020a). Lapatinas (2019) has found empirically that by facilitating the creation of new products and hence the acceleration of productive capacity, greater access to the Internet contributes to greater economic sophistication, i.e., economic complexity.…”

Effect of Poverty on Services Export Concentration in Developing Countries

“…Greater access to the Internet can promote services export diversification through its impact on innovation (e.g., Paunov, 2013), export product diversification (e.g., Chen, 2013;Lapatinas, 2019), international trade (e.g., Weinhold, 2002, 2004;Choi, 2010;Gnangnon and Iyer, 2018) and foreign direct investment inflows (e.g., Choi, 2003). Gnangnon (2020c) has obtained empirically that greater access to the Internet is positively associated with services export diversification.…”

“…On the other side, Gnangnon (2020b) has obtained that AfT flows, including both AfT for services sectors and AfT for non-services sectors influence positively services export diversification. Finally, Gnangnon (2020c) has demonstrated empirically that greater access to the Internet enhances services export diversification, notably through the channels of innovation, merchandise exports (including export product concentration) and foreign direct investment inflows.…”