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.