ICT Development Index and Determinants of Service Trade: Evidence from Top Ten Exporters to Indonesia
Prosiding International Conference on Sustainable Innovation (ICoSI),
Vol. 2 No. 2 (2022): Optimizing Global Benefit for Future Wellbeing
Abstract
The world is now entering the era of industrial
revolution 4.0, which emphasizes the pattern of digital economy,
artificial intelligence, big data and robots or commonly known as
the phenomenon of innovation chaos. With the rapid development
of electronics, Information and Communication Technology
(ICT), better known as ICT-based electronic advances, this has an
impact on international and domestic trade. There is progress in
ICT, in this case making distance less influential in trade. This is
because there is no need for meetings or face-to-face meetings
because they have been replaced by electronic mail or cellphones.
In this study, we want to examine the impact of ICT on
international trade, especially the total service trade between the
ten highest service sector exporters to Indonesia. This study uses a
panel data with gravity model framework for the period of 2012-
2016. The results show that, ICT has a positive and significant
impact on export of ten countries services to Indonesia. Other
variables such as the GDP of the exporting country have a positive
effect on trade service, while export destination countries have
negative effect on trade services. In addition, distance, has negative
and significant effect on service trade. This is in line with the
gravity model theory, whether distance has negative relationship on
trade In this case, distance represents transportation cost. Country
characteristic such as openness of exporters hasa positive and
significant effect on service trade. In contrast, openness of
destination country has negative and significant effect on service
exports to Indonesia
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