Factors Driving the Export of Information and Communications Technology Products in Emerging Industrial Economies

Jeffrey B. Nugent, Mehmet Demiral

Abstract


This paper provides new evidence for the determinants of the export performance in the information and communications technology (ICT) sectors using a panel datasets of 30 emerging industrial economies (EIEs) for a 15-year period spanning from 2000 to 2014. The export performance is proxied by the export share of the ICT products in total export while its potential determinants are the imports of the ICT products (learning effect), index of product concentration in export (specialization effect), inward foreign direct investment stock (exogenous technology transfer and diffusion effects), consumer price index (stability effect) , real gross domestic product per capita (income effect), real effective exchange rate (terms of trade effect) and research and development expenditures (indigenous innovation effect). In the empirical part, cross-section fixed effects least square and, in order to control for endogeneity concern, system generalized method of moments techniques are carried out respectively in an unbalanced panel data framework. Results in general are consistent with the theoretical expectations and evidence of previous studies. Imports of the ICT products, inward foreign direct investment stock and research and development expenditures are positively associated with export performance in ICT sectors while the product concentration, price level and real effective exchange rates have negative impacts. Furthermore, even the insignificant impact of income level might be seen supporting the predictions suggesting that knowledge and innovation intensive ICT products are made in and exported by high-income countries it opposes with the conventional wisdom of convergence and catch-up hypotheses. Overall findings, on the other hand, give incentives for discussing the necessity of new trade theories that can capture today’s increasingly changing trade pattern.   


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