Can ICT Development of Partner Countries Matter for Trade?

초록

This paper examines the role of ICT development on Korea’s export and import performance from 2013 to 2018 with its trading partner countries including some European countries such as France, Germany, Italy, the Netherlands and Switzerland. We investigate whether the relative development in ICT which is measured as the differences in ICT levels between Korea and its trading partner can stimulate trade between countries and whether the relative development of ICT can play a significant role to explain Korea’s trade with other countries. Our empirical analysis shows that development of the trade between two countries tend to grow faster as both countries participating in trade exhibit similar level of ICT. We also find that the development of ICT itself or the ICT development of a trading partner country does not appear to be significant in promoting trade between countries implying mutual development of ICT is necessary to increase trade between countries. Furthermore, it can mitigate the negative impact of geographical distance as the relative development of ICT becomes small. Our empirical analysis suggests that ICT development could enhance trade performance between countries similar to the findings in the existing literature and it emphasizes the relative development of ICT between trading countries matters to make ICT development contribute to boost international trade.

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