The Role of Information and Communication Technology on Service Trade: Case Study of Indonesia Export to ASEAN
Dyah Titis Kusuma Wardani*, Hairunnas
Department of Development Economics, Faculty of Economics and Business, Universitas Muhammadiyah Yogyakarta, Jalan Brawijaya, Tamantirto, Kasihan, Bantul, Daerah Istimewa Yogyakarta, Indonesia 55183
*dyahtitis123[at]gmail.com
Abstract
This study aims to analyze the impact of ICT Development on bilateral trade in the service sector between Indonesia and its trading partners in ASEAN countries. The sample is 4 ASEAN member countries that conduct trade in services with Indonesia. This study uses the gravity model framework of data panel from 1997 to 2007 with a random effect model. This research is continued with robustness check by comparing between random effects and MLE models. To overcome zero trade in the service trade, this study employs PPML semi-log model. Based on the regression analysis, this study is intended to investigate whether ICT has a positive and significant impact on Indonesias service trade to ASEAN countries. Other variables of ASEAN countries as Indonesia trading partners, such as RGDP, distance, population, language, openness index and real exchange rate are also expected to have an influence on Indonesia trade service. In addition, these results are expected to be strong enough for the specifications of alternative models and estimation methods. Based on these results, some expected policy implications can be formulated.
Keywords: Information and Communications Technology (ICT); Service trade; Gravity model
Topic: International Conference of Islamic Economic and Financial Inclusion