Modern Services Export Performances Among Emerging and Developed Asian Economies

Abstract

Advancements in information and communications technologies (ICTs) have expanded the possibilities for trade in modern services and many Asian emerging and developed economies are increasingly participating in these new trade activities. This study examines the export performances of emerging and developed Asian economies in selected modern services—computer and information, business and professional, and telecommunications—using a stochastic frontier gravity model. Estimation results show that the performances of emerging economies in South Asia and the Association of Southeast Asian Nations (ASEAN), in terms of realization of export potential, are considerably weaker than those of developed economies in North America and Europe. The results also show that the number of graduates and the quality of ICT infrastructure in emerging countries are among the key factors in realizing services export potential. These findings suggest that emerging economies need to remove “behind-the-border” constraints and adopt advanced technologies in order to catch up with high-performing developed countries.