Investigating the impact of ICT-trade nexus on competitiveness in Eastern and Western European countries

Abstract

PurposeSince competitiveness is crucial in international trade, this paper contributes to the literature by interrogating the information and communication technology (ICT)-trade nexus on competitiveness in Eastern and Western European countries. Does ICT usage promote or hinder the impact of trade openness on competitiveness? This study attempts to answer two questions: (1) is the interaction of trade and ICT significant in promoting competitiveness? (2) Is the effect significantly different by European classification?Design/methodology/approachWith data on 17 European countries from 2007 to 2020 and using mobile phones and fixed telephone usage as ICT indicators, the study engages the bootstrapped ordinary least squares (BOLS) and method of moments quantile regression (MM-QR) techniques to probe the discourse.FindingsThe empirical findings reveal that (1) the interaction of trade and ICT boost competitiveness; (2) the effect of mobile phone is consistent across the full, East, and West European samples; (3) the interaction effect is also significant across the conditional distribution of competitiveness and (4) mobile phones and fixed broadband usage reveal “leapfrog” effect across the quantiles. Overall, the study submits that ICT usage will enhance the impact of trade, and thus, ICT is a critical enabler of competitiveness in Europe; policy recommendations were discussed.Originality/valueTo the best of the authors' knowledge, this is the first study examining the interaction effect of trade openness and ICT usage on competitiveness in Europe. In other words, the authors attempt to analyze how ICT usage influences trade-competitiveness dynamics. To fill the gap in the literature, the authors' use a sample of 17 European countries from 2007 to 2020. The variables of interest are the competitiveness index, trade openness, and four ICT indicators (mobile phone, fixed telephone subscriptions, fixed telephone subscriptions, and Internet users).

Comprehensive Assessment of Enterprise Digital Competitiveness

“…For instance, Ollo-López and Aramendía-Muneta (2012) claimed that ICT has a great degree of infl uence on competitiveness. Soylu et al (2023) and Milićević et al (2020) have found that ICT boosts the competitiveness of countries. As enterprises are part of countries' economic systems, it could be stated that in line with countries' competitiveness, ICT promotes the level of companies' competitiveness as well.…”

Bridging tea with tourism: empirical evidence from India and Sri Lanka

“…Therefore, the current study is the first attempt to apply the Porter’s Diamond model for comparing the two rival countries, providing unique and significant knowledge to the current research agenda. For investigating the competitiveness and comparativeness of TT destinations between India and Sri Lanka, we used the most recommended and used Porter Diamond model (Constantin et al , 2022; Jiang and Jia, 2022; Xian, 2022; Shuai et al , 2022; Soylu et al, 2022). And the current work contributed to the theory by showcasing the applicability of the Porter Diamond model to TT by responding to a suspended call from previous studies (Cheng et al , 2010; Thimm and Karlaganis, 2020).…”

Re-examining the tourism-led growth nexus and the role of information and communication technology in East Asia and the Pacific

“…The second independent variable which is the moderating variable is a composite index of ICT indicators derived using the Principal Component Analysis (PCA) given the strong correlation among them. In line with the extant literature [ 11 , 16 , [60] , [61] , [62] , [63] , [64] , [65] ], the ICT variables are: mobile phone subscription per 100 people ( MOB ), fixed telephone subscription per 100 people ( FTEL ), fixed broadband subscription per 100 people ( FXB ), and secure Internet servers per million people ( SEV ). In line with the growth literature, the following control variables are included: individuals using the Internet ( NET ), gross fixed capital formation (GFCF), and labour force participation ( LAB ), an index of institutional quality (INST), research and development (R&D), and human capital (HC) proxied by tertiary school enrolment.…”