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Comparative Advantage in the Digital Era: New insights into trade in digital tasks and ICT capital
Client/Funding Institution
Anniversary Fund of the Oesterreichische Nationalbank
Abstract
Comparative advantage remains one of the basic principles of international trade theory. This also holds true in times of globalisation and digitalisation. Taking into account the existence of international value chains and productivity differences across countries, this project identifies comparative advantages of EU member states in the ‘digital endowments’, comprising 'digital tasks' and ICT capital. The project provides new insights into countries' position in ‘digital trade’ and their readiness to master the shift to cyber-physical production systems that characterise the ‘digital revolution’. Furthermore, the underlying institutions and policies that shape these comparative advantages are investigated. This way, the analysis of digital comparative advantage provides valuable insights into what actions may be needed in the EU to defend and improve technological leadership in the digital era.
Duration
March 2021 - February 2023
wiiw team Leader
wiiw Staff
Birgit Buschbom, Alexandra Bykova, Stefan Jestl, Alireza Sabouniha, Robert Stehrer
Publications
- Assessing Digital Leadership: Is the EU Losing out to the US?
- Digital Tasks and ICT Capital: Methodologies and Data
- Comparative Advantages in the Digital Era – A Heckscher-Ohlin-Vanek Approach
Keywords: Comparative advantage, Heckscher–Ohlin–Vanek model, digital tasks, ICT capital, hierarchical decomposition, competitiveness
Countries covered: EU-28
Research Areas: International Trade, Competitiveness and FDI