The role of digital trade in digital technology diffusion: evidence from Africa

Prominent theoretical and empirical findings show that firms engaging in international trade are larger, more productive, and better introduce technological innovations. However, some countries with a higher percentage of ICT goods imports have a low digital technology adoption rate according to the World Bank's digital adoption index (DAI). Findings strategies to increase the contribution of globalization to digital technological diffusion are critical for developing countries, especially countries with the lowest technology adoption in Africa, as the adoption of advanced technology allows them to catch up with richer countries. The paper investigates one-way globalization directly affects digital technology diffusion, which is through digital trade. The main objective of this research is to investigate the channels on how digital trade impacts digital technology diffusion in Africa. It includes the investigation of structural and policy barriers within the channels affecting firms' capabilities and incentives to adopt digital technology. Three different channels of digital trade affecting digital technology diffusion: i) imported digital products (i.e., software), ii) imported digital services (i.e., cloud computing, data processing, online courses on coding, etc.), and iii) imported physical products purchased through e-commerce will be investigated using the panel data modeling techniques at the country level. A data from the surveys and interviews to firms in several countries in Africa, taking into consideration different levels of digital technology adoption, is collected to examine the relationship between structural and policy barriers to digital trade and digital technology adoption

Fandi Achmad
Research Student