| By: |
Anselm Mattes;
Philipp Meinen;
Ferdinand Pavel |
| Abstract: |
This paper empirically assesses whether the deployment and use of Information
and Communication Technology (ICT) infrastructure at the national level
affects trade flows within the European Union (EU) and between the EU and its
main trading partners. The analysis tests the hypothesis that availability and
use of ICT enhances trade by reducing transaction costs and through network
effects that materialize when both trading partners are advanced users of ICT.
The empirical analysis is based on the application of gravity equations in
various robust specifications. The results suggest that ICT does have a
significant impact on EU trade. In particular, we find trade to be enhanced if
both trading partners reveal advanced ICT endowments, which supports the
expected network effects. Additionally, we observe trade diversion effects
from less to highly ICT developed countries. |
| Keywords: |
Exports, ICT, gravity model, international trade, network effects |
| JEL: |
F1 D2 |
| Date: |
2012 |
| URL: |
http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1182&r=ict |