The Internet and International Trade in Services

The results suggest that Internet development abroad has already begun facilitating increased exports of services to the US. Specifically, it is found that the short run impact is about a 1.7 percentage point boost to growth for a 10 percent increase in the Internet variable. The expansion of trade in services has important implications for growth around the world. The standard gains from trade can be expected: resources will be reallocated to their most productive uses and welfare will increase. Moreover, there are likely to be large multipliers on these effects, as other studies have found that services are important inputs into nearly all sectors.