Effect of Information and Communication Environment on Trade Structure

Effect of Information and Communication Environment on Trade Structure

This paper empirically analyzes how the variation in the circumstantial level of information and communications (IC) influences international trade through a panel regression analysis of 30 OECD countries for the period covering 2000-2007 An index of each variable is estimated by grouping circumstantial variables into wired (land), wireless (mobile), and internet communications systems. Results show that both exports and imports (wired, wireless, and internet communications systems) are influenced by domestic and global markets. In addition, the global market has a greater effect than the domestic market on exports, whereas the domestic market has a greater effect on imports. Second, the exchange rate has little effect on trade for most of the 30 OECD countries. Third, the influence of information and communications environment on international trade produced mixed results, and therefore it is difficult draw general relationships between the IT environment and trade. However, information trends such as electronic trade have no significant effects on trade because the index of wireless communications systems is higher than that of internet communications systems for most countries.