ICT's effect on trade: Perspective of comparative advantage

- This paper demonstrates that ICT can be a source of comparative advantage in trade.
- Exporter's ICT data and bilateral industrial level trade data in year 2013 are used.
- We identify with interactions between industry and exporter characteristics.
- Results show that ICT promotes export more in industries using ICT intensively.

This paper uses country-level ICT data and bilateral trade data in 2013 to test whether cross-country differences in ICT can be a source of comparative advantage in international trade. Empirical results show that a country's export in one industry increases 10 percent if the country's ICT development index increases 1 standard deviation (SD) and industry's R&D intensity increases 1 SD. The export increase is 25 percent in the case of task complexity.