This study analyzed the impact of ICT technology on economic growth and trade in G20 countries. The study found that digital transformation and the development of artificial intelligence have had a significant positive impact on the global digital economy, driving productivity improvement, innovation, and trade.
The study used panel data and found that ICT technology progress contributed about 0.33% to economic growth, while product trade expanded about 0.12% and service trade expanded about 0.14%. The study also identified a "Diminishing Margin Returns of ICT on trade" phenomenon, where trade increases as ICT develops, but the rate of trade decreases over time.
The study suggests that expanding government investment in ICT technology development and innovation and establishing digital trade norms could help maximize the effect of increasing trade, as digital trade can become an engine for new growth.
The study has limitations, such as a limited sample size and the use of panel data, but its findings have important implications for policymakers and businesses in developing countries.
JEL classification: O3, F1, F14, F15, and D24