Abstract

This paper examines the impact of ICT access and ICT use on exports and imports of the selected service categories over the period from 2005 to 2019 in Korea. By acknowledging that Korea is the frontrunner in the development of ICT, the study pays special attention to the role of ICT on exports and imports of service categories. In this regard, the aim of this study is to identify key determinants of exports and imports of services by employing the gravity model. The estimation results show that some coefficients of ICT access and ICT use have a significant positive effect on exports and imports of services respectively. However, contrary to expectations, unexpected signs and no significant effects are found in some categories. The reason for this is partly related to the use of disaggregated data instead of using aggregated data. Meanwhile, the interesting result of this study is that ICT use plays a more important role in increasing trade in service categories than ICT access does in many categories. The study also notes that there is a strong positive and significant relationship between exports and imports of service categories and macro-economic variables such as per capita GDP, trade openness and broad money. Up to recently, Korea remains to employ regulatory policies in individual service sectors compared to the other countries. Therefore, it is highly desirable for Korea to lift regulatory restrictions to provide a better environment for trade in services.