ICT use as a determinant of export activity in manufacturing and service firms: Multi-country evidence

Abstract

The use of ICT is profoundly changing the way international business is done. The study aims to extend our understanding of export performance determinants by examining the relationship between different uses of ICT and export activity of firms for a range of European countries and doing this for a sample of larger manufacturing as well as service firms. A probit regression is used to examine whether firms that have a website, support online transactions or have a higher proportion of employees with access to broadband internet are more likely to export than similar firms that do not, controlling for a wide range of firm characteristics. This study is based on harmonized firm-level data provided by statistical offices of 11 EU countries to which the same empirical model was applied, providing results that are fully comparable across countries. The findings suggest heterogeneity amongst countries and specific characteristics of service firms. Whereas in some of the countries e-sales are being positively associated with the probability of exporting for firms from both sectors, having a website is only relevant for manufacturing firms and broadband-Internet-enabled employees are only relevant for service firms. ICT use does not appear to be of particular importance for firm export in a number of countries, opening up a question of what country characteristics can help explain the differences in the role ICT use plays in export performance.

Keywords

• Internet
• ICT
• e-sales
• exports
• service firms