Thursday, December 18, 2014

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[IWS] USITC: INTERNET USE AND OPENNESS TO TRADE [December 2014]

IWS Documented News Service

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Institute for Workplace Studies-----------------Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor--------------------Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

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U.S. International Trade Commission (USITC)

 

INTERNET USE AND OPENNESS TO TRADE [December 2014]

by David Riker

http://www.usitc.gov/publications/332/ec201412c.pdf

[full-text, 24 pages]

 

Abstract

This paper presents an econometric model that links the number of broadband users in a country

to its volume of international trade in goods and services. The model indicates that the growth in

broadband use between 2000 and 2011 increased a country’s openness to trade (measured by the

ratio of their total trade to their GDP) by 4.21 percentage points on average, with much larger

effects in high income countries (a 10.21 percentage point increase on average) than in developing

countries (a 1.67 percentage point increase on average). We also use the econometric model to

project how each country’s openness to trade will be affected by expected future growth in

broadband use: we project that the trade-to-GDP ratios will increase an additional 6.88 percentage

points on average in the high income countries and an additional 1.67 percentage points on average

in the developing countries due to further growth in broadband use over the next five years.

 

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