The impact of digitalization on export of high technology products: A panel data approach*

Abstract

ABSTRACT This study argues that easy access to new information using information and communication technologies (ICT) will bring both more technological development and information about new markets, together catalyzing high technology (high-tech) production. This paper aims to show the impact of digitalization on the technology intensity of export. We use the ICT Development Index (IDI) as a proxy for the digitalization level of a country and the value of the exports of high-tech products as a proxy for the technology intensity of export. IDI comprises three components, including ICT access, usage and skills. These statistics reflect the ICT development of the country. To analyze the relevant relationship, we use panel data on countries between 2007 and 2017. The system-generalized method of moments (system GMM) dynamic panel estimator is utilized in the estimations, permitting us to control for potential endogeneity problems between the main dependent and independent variables. Results show that in developing countries, IDI has a significant effect on the export of high-tech products. In addition, the significance of the main components of IDI varies. These results suggest that developing countries striving to increase the export of high-tech products should invest more in ICT.