ARE INFORMATION AND COMMUNICATION TECHNOLOGIES EFFECTIVE IN SERVICE EXPORTS IN SOUTH CAUCASIAN COUNTRIES?

Abstract

The advancement of information and communication technologies (ICT) in Caucasian countries has begun to have an impact on the service sector. ICT has made many firms in the service sector more competitive and innovative, enabling them to achieve high productivity at a low cost. These effects of ICT in the service sector can lead to economic growth and development in Caucasian countries. This study examines the impact of information and communication technologies on service exports in Caucasian countries. Given the differences in internet infrastructure, internet access, and internet availability across each country, a distinct ICT indicator is utilized for each country. The empirical findings reveal that fixed telephony contributes to service exports in Azerbaijan, service exports are influenced by individual internet usage rates in Georgia, and mobile telephony plays a role in service exports in Armenia.

Keywords

• Service Export
• ICT
• Time Series
• South Caucasıan Countrıes

References

1. Aijaz, U., Bano, S., & Lodhi, K. S. (2022). Internal determinants of the service trade exports of China: A time-series analysis. Pakistan Journal of International Affairs, 5(2).
2. Antonelli, C. (2000). Collective knowledge communication and innovation: the evidence of technological districts. Regional studies, 34(6), 535-547.
3. Aydınbaş, G., & Erdinç, Z. (2023). The Effects of Information Communication Technologies on Human Capital: A Panel Data Analysis. Journal of Economy Culture and Society, (68), 119-129.
4. Baumol, W. J. (1967). Macroeconomics of unbalanced growth: the anatomy of urban crisis. The American economic review, 57(3), 415-426.
5. Biswas, S. (2020). Hizmet Sektöründe Bilgi Teknolojisi—Hindistan için Bir Vizyon. http://itt.nissat.tripod. com/itt9703/itvision.htm. Accessed November 10, 2021.
6. Bloom, N., Sadun, R., & Reenen, J. V. (2012). Americans do IT better: US multinationals and the productivity miracle. American Economic Review, 102(1), 167-201.
7. Bradley, J., Modesto, L., & Sosvilla-Rivero, S. (1995). Hermın: A macroeconometric modelling framework for the EU periphery. Economic Modelling, 12(3), 221-247.
8. Brynjolfsson, E., & Hitt, L. M. (2000). Beyond computation: Information technology, organizational transformation and business performance. Journal of Economic perspectives, 14(4), 23-48.

9. Chatti, W., & Khoj, H. (2020). Service export sensitivity to Internet adoption: evidence from dynamic panel data analysis. Res World Econ, 11(6), 259-268.
10. Choi, C. (2010). The effect of the Internet on service trade. Economics Letters, 109(2), 102-104.
11. Clark, C. (1941). The Conditions of Economic Progress. The Economic Journal, 51(201), 120. https://doi. org/10.2307/2225658
12. Clarke, G. R. (2002). Does internet connectivity affect export performance? Evidence from the transition economies (No. 2002/74). WIDER Discussion Paper.
13. Clarke, G. R., & Wallsten, S. J. (2006). Has the internet increased trade? Developed and developing country evidence. Economic Inquiry, 44(3), 465-484.
14. Clarke, G. R. G. (2008). Has the internet increased exports for firms from low and middle-income countries? Information Economics and Policy
15. Çapık, E., & Ören, H. G. Ü. (2023). Analysis of the Relationship between Service Export and Economic Growth in the Framework of South Caucasus Countries. Sosyoekonomi, 31(55), 233-252.
16. Dickey, D. A., & Fuller, W. A. (1981). Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root. Econometrica, 49(4), 1057. https://doi.org/10.2307/1912517
17. Doyar, B. V., Rzali, S., & Dikkaya, M. (2023). Development of the ICT sector and the determinants of Internet use in the Southern Caucasus. Telecommunications Policy, 47(1), 102455.
18. Duque, R., Collins, M., Abbate, J., & Azambuja, C. C. (2006). Past, present, and future of research in the information society (W. Shrum, K. R. Benson, W. E. Bijker, & K. Brunnstein, Ed.). Springer.
19. Evangelista, R., & Sirilli, G. (1995). Measuring innovation in services. Research Evaluation, 5(3), 207-215. https://doi.org/10.1093/rev/5.3.207
20. Fisher, A. G. B. (1939). Productıon, Prımary, Secondary and Tertıary. Economic Record, 15(1), 24-38. https:// doi.org/10.1111/j.1475-4932.1939.tb01015.x
21. Fink, C., Mattoo, A., & Neagu, I. C. (2005). Assessing the impact of communication costs on international trade. Journal of International Economics.
22. Freund, C., & Weinhold, D. (2002). The Internet and International Trade in Services. American Economic Review, 92(2), 236-240. https://doi.org/10.1257/000.282.802320189320
23. Granger, C. W. (1969). Investigating causal relations by econometric models and cross-spectral methods. Econometrica: journal of the Econometric Society, 424-438.
24. Granger, C. W. J., & Newbold, P. (1974). Spurıous Regressıons in Econometrıcs. 111.
25. Grubel, H. G., & Walker, M. (1989). Service industry growth: Causes and effects. Fraser Institute.
26. Hospers, G. J. (2004). Regional economic change in Europe: A neo-Schumpeterian vision (Vol. 3). LIT Verlag Münster.
27. ITU. (2018). Measuring the information society report 2018, ume 2. The International Telecommunication Union. https://www.itu.int/en/ITU-D/Statistics/Documents/ publications/misr2018/MISR-2018- Vol-2-E.pdf.
28. ITU. (2023a). Percentage of individuals using the internet. International Telecommunications Union. Retrieved from https://datahub.itu.int/data/?i=19303.xlsx Accessed November 10, 2023
29. ITU. (2023b). Fixed broadband subscriptions. International Telecommunications Union. Retrieved from https://datahub.itu.int/data/?i=19303.xlsx Accessed November 10, 2023
30. ITU. (2023c). Mobile cellular subscriptions. International Telecommunications Union. Retrieved from https://datahub.itu.int/data/?i=11623.xlsx Accessed November 10, 2023
31. ITU. (2023d). Fixed telephone subscriptions. International Telecommunications Union. Retrieved from https://datahub.itu.int/data/?i=15.xlsx Accessed November 10, 2023
32. Izmaylov, V. (2001). In Information technology prospects in the Caucasus 1st ISN executive conference. Internet DEvelopment in Azerbaijan, 1-12.
33. Jungmittag, A., & Welfens, P. (2009). Liberalization of EU telecommunications and trade: theory, gravity equation analysis and policy implications. International Economics and Economic Policy
34. Johansen, S. (1988). Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-254. https://doi.org/10.1016/0165-1889(88)90041-3
35. Johansen, S., & Juselius, K. (1990). Maxımum Lıkelıhood Estımatıon and Inference on Coıntegratıon-Wıth Applıcatıons to The Demand For Money: Inference on Coıntegratıon. Oxford Bulletin of Economics and Statistics, 52(2), 169-210. https://doi.org/10.1111/j.1468-0084.1990.mp52002003.x
36. Karumidze, S. (2001). Information Tecnology Prospects in the Caucasus 1st ISN Executive Conference. Development of Internet in Georgia, 1-17.
37. Kırca, M., & Akkuş, Ö. (2020). Internet usage, economic growth and electricity consumption: The case of EU-15. Ekonomi Politika ve Finans Araştırmaları Dergisi, 5(3), 576-594.
38. Krikorian, O. (2010). Caucasus analytical digest 15/10. Caucasus Analytical Digest, 10, 2-4.
39. Kumar, V., Leone, R. P., & Gaskins, J. N. (1995). Aggregate and disaggregate sector forecasting using consumer confidence measures. International Journal of Forecasting, 11(3), 361-377. https://doi. org/10.1016/0169-2070(95)00594-2
40. Kuźnar, A. (2016). Value creation in the service economy. Warsaw School of Economics.
41. Luong, T. A., & Nguyen, T. H. (2021). The Impact of Ict on Servıce Trade. The Singapore Economic Review, 66(04), 1073-1086. https://doi.org/10.1142/S021.759.082049003X
42. Malik, M. H., & Velan, N. (2020). An analysis of IT software and service exports from India. International Trade, Politics and Development, 4(1), 3-25. https://doi.org/10.1108/ITPD-12-2019-0012
43. Mattes, J. (2012). Dimensions of Proximity and Knowledge Bases: Innovation between Spatial and Non- spatial Factors. Regional Studies, 46(8), 1085-1099. https://doi.org/10.1080/00343.404.2011.
44. McAfee, A., Brynjolfsson, E., Davenport, T. H., Patil, D. J., & Barton, D. (2012). Big data: the management revolution. Harvard business review, 90(10), 60-68.
45. Mills, B. F., & Whitacre, B. E. (2003). Understanding the Non‐Metropolitan—Metropolitan Digital Divide.
46. MINCOM. (2021). Information technologies. Retrieved from https://mincom.gov.az/en/view/pages/10/ Accessed November 10, 2021.
47. Miles, I. (2000). Services innovation: coming of age in the knowledge-based economy. International Journal of Innovation Management, 4(04), 371-389.
48. Myovella, G., Karacuka, M., & Haucap, J. (2020). Digitalization and economic growth: A comparative analysis of Sub-Saharan Africa and OECD economies. Telecommunications Policy, 44(2), 101856.
49. Nasir, S., & Kalirajan, K. (2016). Information and communication technology-enabled modern services export performances of Asian economies. Asian Development Review, 33(1), 1-27.
50. Nath, H. K., & Liu, L. (2017). Information and communications technology (ICT) and services trade. Information Economics and Policy, 41, 81-87.
51. OECD. (2000). The Service Economy. Busıness and Industry Polıcy Forum Series.
52. OECD & Eurostat. (2018). Oslo Manual 2018: Guidelines for Collecting, Reporting and Using Data on Innovation, 4th Edition. OECD. https://doi.org/10.1787/978.926.4304604-en
53. Onyeiwu, S. (2002). Inter-country variations in digital technology in Africa: Evidence, determinants, and policy implications (No. 2002/72). WIDER Discussion Paper.
54. Ozcan, B. (2018). Information and communications technology (ICT) and international trade: evidence from Turkey. Eurasian Economic Review, 8, 93-113.
55. Posner, M. V. (1961). Internatıonal Trade and Technıcal Change. Oxford Economic Papers, 13(3), 323-341. https://doi.org/10.1093/oxfordjournals.oep.a040877
56. Ramakrishna, G. (2010). Open Policies and Service Sector Growth in India: Does Service Sector Growth Influence Economic Growth of India? SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1633238
57. Sakenov, D. (2018). History of ICT (Information and communications technology). Sutori. https:// www.sutori.com/en/story/history-of-ict-information-and-communications-technology— N7J51bQqSU7vLWcVfdn5M9qa. Accessed December 12, 2021.
58. Schettkat, R. (2007). The Astonıshıng Regularıty of Servıce Employment Expansıon. Metroeconomica, 58(3), 413-435. https://doi.org/10.1111/j.1467-999X.2007.00276.x
59. Shanmugam, V., & Latha, C. (2014). Growth of Service Sector in India. IOSR Journal of Humanities and Social Science, 19(1), 08-12. https://doi.org/10.9790/0837.191.40812
60. Sims, C. A. (1980). Macroeconomics and Reality. Econometrica, 48(1), 1. https://doi.org/10.2307/1912017
61. Stoneman, P., & Karshenas, M. (1995). Technological diffusion. İçinde Handbook of the economics of innovation and technological change (ss. 265-297). Oxford: Blackwell.
62. Toda, H. Y., & Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of econometrics, 66(1-2), 225-250.
63. UNCTADstat. (2023). Retrieved from https://unctadstat.unctad.org/datacentre/dataviewer/ US.TradeServCatTotal Accessed October 27, 2023
64. UNDP. (2001). Making new technologies work for human development. United Nations Development Programme (UNDP).
65. USAID. (2009). Armenıan Informatıon Technology Sector Software and Servıces.
66. Vandermerwe, S., & Chadwick, M. (1989). The Internationalisation of Services. The Service Industries Journal, 9(1), 79-93. https://doi.org/10.1080/026.420.68900000005
67. Vardanyan, N., & Sarkisyan, Y. (2004). Armenıan Informatıon Technology Sector Software and Servıces.
68. Vemuri, V. K., & Siddiqi, S. (2009). Impact of Commercialization of the Internet on International Trade: A Panel Study Using the Extended Gravity Model. The International Trade Journal, 23(4), 458-484. https://doi.org/10.1080/088.539.00903223792
69. Vernon, R. (1966). International Investment and International Trade in the Product Cycle. The Quarterly Journal of Economics, 80(2), 190. https://doi.org/10.2307/1880689
70. Visús, S. B., & Zayas, J. M. (2003). Service export flows: empirical evidence for the European Union. Documentos de trabajo= Working Papers (Instituto Complutense de Estudios Internacionales): Serie previa, (3), 1.
71. Wajda-Lichy, M., Fijorek, K., Denkowska, S., & Kawa, P. (2022). The impact of information and communication technology on services exports: Evidence from developed and developing economies. International Entrepreneurship Review, 8(3), 69-80. https://doi.org/10.15678/IER.2022.0803.05
72. Wakelin, K. (1998). Innovation and export behaviour at the firm level. Research Policy, 26(7-8), 829-841. https://doi.org/10.1016/S0048-7333(97)00051-6
73. Wang, M. L., & Choi, C. H. (2019). How information and communication technology affect international trade: A comparative analysis of BRICS countries. Information Technology for Development, 25(3), 455-474. https://doi.org/10.1080/02681.102.2018.1493675
74. Wardani, D. T. K., Nahar, F. H., & Hairunnas, H. (2020). The Role of Information and Communication Technology on Service Trade: Case Study of Indonesia’s Export to ASEAN Countries. Media Trend, 15(2), 236-248. https://doi.org/10.21107/mediatrend.v15i2.5858
75. World Bank. (2023). World development indicators. Retrieved from. https://databank.worldbank.org/ source/world-development-indicators Accessed October 29, 2023.
76. Witt, U., & Gross, C. (2020). The rise of the “service economy” in the second half of the twentieth century and its energetic contingencies. Journal of Evolutionary Economics, 30(2), 231-246. https://doi. org/10.1007/s00191.019.00649-4