Information communication technology and manufacturing industry exports based on technology intensity in OECD and non-OECD countries

Abstract

Studies on the effect of Information and Communication Technology (ICT) on the export of the manufacturing industry, as disaggregated into the low-, medium-, and high-technology intensity, were lacking. However, the trade impact of ICT is mixed and relies on countries’ development and adoption of technology. To this end, this study explicitly contributes to this strand of literature. By using some key and popular ICT indicators we examined the comparative influence of ICT on the manufacturing industry exports defined by their technology intensity/adoption in OECD and non-OECD countries. A panel data technique with the PPML (Pseudo-Poisson Maximum Likelihood) covering the period 2010–2018 was applied for the analysis. Our empirical strategy indicates that internet use only promotes manufacturing exports of high-technology intensity in OECD countries. Low-technology intensity manufacturing exports were negatively affected by an increase in the use of the internet in all the samples of non-OECD and OECD economies. Except for high-technology, an increase in mobile phone subscribers is associated with increased manufacturing exports in all categories of industries and all sample countries. Broadband subscriptions only positively affect exports of low-technology intensity in OECD countries and negatively affect exports of medium-technology in non-OECD countries. The economic complexity index shows a positive influence on exports in OECD and non-OECD countries except for low-technology intensity. Human capital has been found to influence manufacturing exports in OECD countries and reduce exports in non-OECD countries. In both the OECD and non-OECD countries, positive and significant effects of GDP and trade were observed in all categories of technology adoption. These findings imply that in OECD and non-OECD countries ICT is an important aspect worth considering in trade policy making due to its significant influence on exports. ICT services need to be checked by the government to ensure quality, efficient, and effective delivery for better export. Findings also support the practical significance of ICT especially in developing OECD countries.