Digitizing Malaysia: Examining the Role of ICT in Malaysia’s Exports of Goods and Services
Keywords:
Gravity model, ICT, International Trade, Malaysia, Services exportsAbstract
ICT plays an important role in Malaysia’s aims to develop a digital economy. Given the importance of trade in Malaysia, the objective of this study is to examine the impact of ICT on goods and services exports. Unlike previous models, the study constructs an ICT development index to test for the impact of ICT. It also differs from previous studies in using ICT network to capture network effects on international trade. A gravity model is used on a set of panel data from 2000 to 2012. The findings indicate that while ICT development increases services export, the impact of ICT network is not significant for goods export. Trade costs, however, have a significant impact on both services and good exports. Therefore, policies to promote goods and services exports in Malaysia have to consider improving connectivity together with the development of ICT in the country and the region.
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