Role of education human capital in ICT-trade relationship

The study investigates how ICT affects trade because of prior effect of education human capital on ICT using gravity panel model for the period 2000-2018 including 130 countries. First, we find positive and significant relationship between ICT use and bilateral merchandise exports flows. Second, the findings indicate that higher ICT use by both the exporting and importing country has a positive impact on exports of countries with higher education human capital. The effects of interaction between ICT and human capital on exports flows from low-and middle-income to high income countries as well as trade between low and middle-income countries are positive and significant for the exporter country. The interaction terms on trade flows involving high-income countries as exporters, in contrast, are negatively significant. For importers, interaction has positive and significant effects except trade flows from high-income to low-and middle-income countries, where it asserts positive but insignificant effect.