Primary Information Sector Services and Foreign Trade: Evidence from Korea and Japan

Industrialized economies and Newly Industrializing Countries are increasingly information intensive. To some, this heralds 'deindustrialization', to others it indicates a new stage in economic development, i.e. the advent of the global information economy. The paper contributes to this debate by exploring the trade involvement of primary information sector services in Japan and Korea. Empirical evidence of direct and total exports of such services and their future prospects, is discussed. We then explore the hypothesis that purchased information services are a statistically significant determinant of comparative advantage and export involvement of manufacturing sectors. This test is only partly successful. Although useful for some other analytical purposes, our information services variable is likely to be too heterogeneous for fruitful trade analysis.