Interesting – Internet, Exports and Growth in Low and Middle-income Countries

Interesting – Internet, Exports and Growth in Low and Middle-income Countries

February 8, 2008 0 Comments

(February 8, 2008) – As you know, I believe the most useful way to look at the economy is as a highly-connected information network. The information networks for market economies, which use prices to transmit information on relative scarcities, are extremely efficient compared with non-market command and control systems. That is one of the reasons why a number of low-income countries, which have increasingly allowed prices to clear markets, have grown so fast in recent years.

Countries around the world are also waking up to the importance of Internet access to growth. The current issue of Information Economics and Policy contains an interesting article by George Clarke from The World Bank, ScienceDirect – Information Economics and Policy : Has the internet increased exports for firms from low and middle-income countries. I have copied the abstract below.

Many commentators have suggested that the internet is one of the forces driving globalization. This paper assesses one aspect of these claims, looking at whether internet access appears to affect the export performance using data from enterprises in low and middle-income economies in Eastern Europe and Central Asia. The paper finds a strong correlation between exporting and internet access at the enterprise level. Moreover, this correlation remains after controlling factors that might affect both exports and internet connectivity and self-selectivity.

JR

John Rutledge

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