International Comparison and Trade Effects of Digital Innovation

8 Pages Posted: 20 Jun 2019

See all articles by Nakgyoon Choi

Nakgyoon Choi

Korea Institute for International Economic Policy

Kyu Yub Lee

Korea Institute for International Economic Policy

Hyuk-Hwang Kim

Korea Institute for International Economic Policy

Date Written: January 18, 2019

Abstract

Digital innovation will bring about revolutionary changes in all activities in the social and political sphere, not to mention the areas of technology, industry, trade, and other economic transactions. In this study, we analyzed the level of digital innovation and digital utilization by country and industry. According to the results of our analysis, significant improvement was made in the world's digital innovation (number of patents), led by the U.S. and Japan, showing a stair-step increase in the years of 1998 and 2010. This study also examines the impact of digital innovation on international trade. Counterfactual analysis based on a variant of the Ricardian model shows that digital innovation is beneficial to international trade. In other words, if digital innovation boosts fundamental productivity, it triggers growth in international trade at both sector-level and country-level.

Keywords: Digital Innovation, Trade Effects

Suggested Citation

Choi, Nakgyoon and Lee, Kyu Yub and Kim, Hyuk-Hwang, International Comparison and Trade Effects of Digital Innovation (January 18, 2019). KIEP Research Paper, World Economy Brief 19-01, Available at SSRN: https://ssrn.com/abstract=3407065 or http://dx.doi.org/10.2139/ssrn.3407065

Nakgyoon Choi (Contact Author)

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Kyu Yub Lee

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

Hyuk-Hwang Kim

Korea Institute for International Economic Policy ( email )

[30147] Building C, Sejong National Research Compl
Seoul, 370
Korea, Republic of (South Korea)

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