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Does digital service trade promote inclusive domestic growth? – Empirical research of 46 countries

Published online by Cambridge University Press:  24 October 2024

Alai Yeerken Open the ORCID record for Alai Yeerken [Opens in a new window]  and
Deng Feng
Alai Yeerken
Affiliation:
School of Economics and Management, Xinjiang University, Urumqi, China
Deng Feng*
Affiliation:
School of Economics and Management, Xinjiang University, Urumqi, China
*
Corresponding author: Deng Feng; Email: [email protected]
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Abstract

This study utilises panel data of 46 countries from 2005 to 2019 to examine the impact of digital service trade (DST) on inclusive growth. Inclusive growth is a growth model that promotes economic growth and development, while also building social equity and inclusiveness and balancing environmental sustainability. The findings indicate that a nation’s DST development significantly fosters domestic economic growth and development, specifically through its employment enhancement effect. DST substantially promotes social equity and inclusiveness, mainly through the inclusive innovation effect. However, DST is also found to increase carbon emissions, impeding environmentally sustainable growth, specifically via the energy demand effect. Hence, DST exerts diverse impacts on different facets of inclusiveness. The study also reveals heterogeneity in the effects of DST on the three aspects of inclusive growth related to trade’s import–export dynamics, income levels, and DST barrier intensities. This paper contributes to and refines the body of research on the relationship between DST and inclusive growth. It offers policy suggestions for crafting more open and mutually beneficial DST policies to foster social equity and inclusive global trade.

Keywords

digital service tradedomestic inclusive growthemployment promotionenvironmental sustainabilityincome inequalityinclusive innovationsocial equity and inclusivenessF140J31I31
Type
Original Article
Information
The Economic and Labour Relations Review , Volume 35 , Issue 2 , June 2024 , pp. 292 - 318
Copyright
© The Author(s), 2024. Published by Cambridge University Press on behalf of The University of New South Wales

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