A PANEL DATA ANALYSIS OF INFORMATION AND COMMUNICATION TECHNOLOGIES EFFECTS ON INTERNATIONAL TRADE

Abstract

The rapid development of information and communication technology (ICT) and is one of the main factors in increasing the efficiency, productivity, and overall performance of a system, has encouraged a growing number of researchers to study and measure the effects of this technology on economic growth, this thesis also aims to explore the increasing importance of ICT usage in international trade which one of the key factors in economic growth. Different indexes in measuring ICT usage are reviewed with their pillars and the top country rankings. Taking the Global Competitiveness Index 2019 as the source, this study examines the effects of ICT on the integration of countries in international trade by considering the Trade/GDP ratio as an indicator of their integration. The panel data is generated by taking 21 countries and ten years into account without time lag and eight years with two years of time lag. The results show that there is a significant positive relationship between ICT usage and a country's Trade/GDP ratio. Especially, the Individuals using the internet, University-industry collaboration in research and development (R&D), and Availability of scientists and engineers are seen to be three of the most influential factors to affect the Trade/GDP ratio positively, while on the other hand, firms' FDI and technology transfer and Government procurement of advanced technology products are the most negatively sub-pillars of ICT usage. Additionally, the University-industry collaboration in research and development also seems to be candidates for being influential factors for the Trade/GDP ratio in the long run.