聯(lián)合國亞太經(jīng)社會（UNESCAP）：數(shù)字貿(mào)易與財(cái)富不平等：來自亞太地區(qū)的例證

No.235|2024

ESCAP

EconomicandSocialCommission

forAsiaandthePacific

DigitalTradeandWealth

Inequality:Evidencefrom

AsiaPacificregion

SanjeevVasudevan

MiniPThomas

ASIA-PACIFICRESEARCHANDTRAININGNETWORKONTRADE

WorkingPaper

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ThispaperisapolicyresearchpaperssupportedbytheFEALACfundedprojecton“SupportthestrengtheningofpoliciestomonitorandpromotetheparticipationofMSMEsincross-bordergoodsandservicese-commerceforinclusiveandsustainablepandemicresponseandrecoveryinEastAsiaandLatinAmerica”.

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iii

ASIA-PACIFICRESEARCHANDTRAININGNETWORKONTRADE

WORKINGPAPER

DigitalTradeandWealthInequality:EvidencefromAsiaPacificregion

SanjeevVasudevan1,MiniPThomas?

Pleasecitethispaperas:

SanjeevVasudevanandMiniPThomas(2024)."DigitalTradeandWealthInequality:EvidencefromAsiaPacificregion”,ARTNeTWorkingPaperSeriesNo.235,

February2024,Bangkok,ESCAP

Availableathttp://artnet.unescap.orc

Acknowledgement:

Thispaperisasubmissionforthe2023ESCAP-UNCTAD-UNIDO-ARTNeTcallforpapers,underthetheme“UnleashingDigitalTradeandInvestmentforSustainableDevelopment.”TheauthorisgratefulforthevaluablefeedbackandsupportfromthepeerreviewersattheESCAPSecretariat,whoseconstructiveinputwaspivotalinrefiningandfinalizingthiswork.Additionally,thispaperwasbenefitedfromtheESCAPimplementationoftheFEALAC-fundedprojecton"SupportingtheStrengtheningofPoliciestoMonitorandPromotetheParticipationofMSMEsinCross-BorderGoodsandServicesE-CommerceforInclusiveandSustainablePandemicResponseandRecoveryinEastAsiaandLatinAmerica.”

1AssistantProfessor.MadrasSchoolofEconomics.Chennai.TamilNadu.India.e-mail:sanieey@mse.ac.in

2AssociateProfessor,DepartmentofEconomicsandFinance,BITSPilaniHyderabadCampus,India,email:

mini@hyderabad.bits-pilani.ac.in

iv

Abstract

Thispaperexaminestheimpactofdigitaltradeonwealthinequalityfor40developedanddevelopingmembercountriesoftheUNESCAPAsiaPacificregion,fortheperiodfrom2005-2021.Dataondigitaltrade,measuredusingtwoindicators,namely,tradeindigitallydeliverableservicesandtradeinICTgoods,isobtainedfromUNCTAD.Dataonwithin-countrywealthinequality,measuredusingtwoindicators,namely,wealthshareofthetop1percentileandtop10percentileoftheadultpopulation,issourcedfromtheWorldInequalityDatabase.TheoveralltrendindigitalservicestraderestrictivenessandwealthinequalitywithintheAsiaPacificregionisanalysed.Basedonarichpaneldatasetinclusiveofstandardcontrolvariables,thisstudythenestimatesthedigitaltrade-wealthinequalitynexuswiththehelpofpanelfixedeffectsandinstrumentalvariableestimationtechniques.Thefollowingkeyfindingsemerge:First,wefindempiricalevidenceinsupportofthepositiveandsignificantimpactofinternationaltrade,inbothdigitallydeliverableservicesandICTgoods,onwithin-countrywealthinequalityintheAsiaPacificregion.Second,however,weobservemarkedheterogeneitybetweendevelopedanddevelopingmembercountriesofESCAP,withtheeffectofdigitaltradeonwealthinequalityturningouttobesignificantfordevelopedcountriesandinsignificantfordevelopingcountries.Policyrecommendationsforstreamliningdigitaltrade,toachievetheSustainableDevelopmentGoalofreducedwealthinequalityareputforthbasedonourfindings.Eliminationofmonopolisticandrestrictivedigitaltradepractices,andimprovingtheregulatoryframeworkpertainingtodigitaltradecanhelpmitigateincreasingwealthinequalityinthedevelopedcountries.Ontheotherhand,removalofobstaclesfacedbysmallandmedium-scaleenterprises,youthandwomenentrepreneursinaccessingandparticipatingindigitaltradeanddigitalplatformscangoalongwayinbringingdownwealthinequalityinthedevelopingeconomies,particularlyintheAsia-Pacificregion.

Keywords:Digitaltrade,digitallydeliverableservices,wealthinequality,AsiaPacific,panelfixedeffects,instrumentalvariableestimation

JELCodes:D31,F10,F13,F14,O15,O57

v

TableofContents

Abstract iv

Introduction 1

ReviewofLiterature 3

2.1Theoreticalbackground 3

2.2EmpiricalEvidence 4

PreliminaryDataAnalysis 5

3.1DigitalTradeinAsiaPacific 5

3.2RegionalEvolutionofWealthInequality,1995-2021 8

3.3Digitaltradeandwealthinequality 10

Data,variabledescriptionandestimationstrategy 11

4.1DataandVariableDescription 11

4.1.1DataSources 11

4.1.2Measuresofwealthinequality 11

4.1.3Measuresofdigitaltrade 11

4.1.4Controlvariables 12

4.2Modelspecificationandempiricalapproach 13

Econometricresultsanddiscussion 14

5.1Baselineresults 14

5.2Developedversusdevelopingcountries 17

5.3Endogeneityconcerns 19

ConclusionsandPolicyImplications 21

Listofreferences 24

Appendix1:Sampleofcountries 27

Appendix2:Pairwisecorrelationmatrix 27

vi

Listoftables

Table1:Descriptivestatistics 13

Table2:Effectsofdigitallydeliverableservicestradeonwealthinequality 15

Table3:EffectsofICTgoodstradeonwealthinequality 16

Table4:EffectsofICTgoodstradeonwealthinequality 17

Table5:Endogeneitycorrection–IVFEestimates 19

Table6:Developedversusdevelopingcountries–IVFEestimates 20

Listoffigures

Figure1:ExportPatternofDigitallyDeliverableServicesfor2021 6

Figure2:TrendsinDigitalServicesTradeRestrictiveness,2021(OECDcountriesofAsia

Pacific) 7

Figure3:TrendsinDigitalServicesTradeRestrictiveness,2021(Selectnon-OECD

countriesofAsiaPacific) 8

Figure4:Regionalevolutionofwealthinequality–top1percentile,1995-2021 9

Figure5:Regionalevolutionofwealthinequality–top10percentile,1995-2021 10

Figure6:WealthinequalityversusdigitaltradeinAsiaPacific,2021 10

1

Introduction

Theriseofthedigitaleconomyinthelastfewdecadeshassignificantlyalteredtheinternationaltradelandscapeglobally.Digitaltradeisdefinedasdigitallyenabledtransactionsintradeingoodsandserviceswhichcanbedeliveredeitherdigitallyorphysically,involvingconsumers,firmsandgovernments(Lopez-GonzalezandJouanjean,2017).Thegrowingpopularityofonlineplatformshasresultedinanincreasingnumberofsmallgoodspackagescrossinginternationalborders,whereasnewdigitaltechnologieshavechangedhowservicesareproducedanddeliveredacrossborders.Digitaltradeisbasedonthemovementofdata,withdataactingbothasameansofproductionaswellasanassetwhichcanbetraded.Ensuringthatdigitaltradeisinclusive,bothwithinandacrosscountries,posesaformidablechallengetopolicymakersworldwide.Smallandmedium-sizedfirms,whichwereearliersupplyingonlyindomesticmarketsduetocostconstraints,cannowcatertoalargeandgrowingglobalcustomerbase,bytakingadvantageofaccesstoonlinemarketplacesofferedthroughdigitaltechnologies.Onlinesellerscanofferproductsatacheaperpriceduetolowercapitalrequirements.However,thereexistsawidedisparitybetweenthedevelopedanddevelopingworldwhenitcomestotheuptakeofinformationandcommunicationtechnology(ICT).Theproportionofindividualsusingtheinternet,anICTSustainableDevelopmentGoal(SDG)indicator,stoodatatoweringfigureof87.26percentforNorthAmericaandEuropein2020.Incontrast,only40.53percentofindividualsinSouthAsiaand57.83percentofindividualsinSoutheastAsiausedtheinternetevenduringthepandemicyearof2020(ITU,2021).

Globalisationandtechnologicalchangehaveresultedinunevenspatialdistributionofwealthandrisingwithin-countryinequality,especiallyinadvancedeconomies(Iammarino,2018).UNCTAD(2021)highlightstheincreasingtendencyoftheworld’slargestdigitalplatforms,suchasApple,Microsoft,Amazon,Alphabet(Google),Facebook,TencentandAlibabatoinvestinallpartsoftheglobaldatavaluechain.Interestingly,allofthesecompanieshavetheirheadquartersintheEconomicandSocialCommissionforAsiaandthePacific(ESCAP)membercountries.Thesecompaniesarekeenonupgradingtheirdatacollection,datatransmission,datastorage,dataanalysis,dataprocessingandfinalusebyheavilyinvestinginuser-facingplatformservices,submarinecablesandsatellites,datacentresandArtificialIntelligence.Reapingthebenefitsofeconomiesofscale,networkeffectsandprivilegedaccesstodata,thesecorporationshavecometoacquiremassivefinancial,marketandtechnologicalpowerandglobalreachinrecentyears.AccelerateddigitalisationinthewakeoftheCOVID-19pandemichasfurtherenhancedtheirsize,profits,marketvalueandmarketdominance.Fourofthesedigitalplatformsaccountedfor67percentoftheglobalrevenuefromcloudinfrastructureservicesinthelastquarterof2020(UNCTAD,2021).Inthisnewdata-drivenworldorder,developingcountriesriskbeingmereprovidersofrawdatatoglobaldigitalplatforms,whilealsohavingtopayforthedigitalintelligenceobtainedfromtheirdata.

2

Thenetwealthofahouseholdisdefinedasallthenon-financialassetsaswellasfinancialassetsoverwhichthehouseholdcanenforceownershiprightsandwhichalsoprovideeconomicbenefitstotheirowners,netofanydebt(Zucman,2019).Non-financialassetssuchasrealestate,landandbuildingsandfinancialassetssuchasbankdeposits,equities,bonds,lifeinsuranceandpensionfundsareincludedinthisdefinitionofwealth.Wealthinequalityisdefinedastheunequaldistributionofwealthandassetsamongthecountriesoftheworldandwithincountries(Njangangetal.,2022).AccordingtoChanceletal.(2022),thetop1%oftheworld'spopulationpossessednearly39timesthewealthofthelowest50%in2021.However,cross-countryscrutinyindicatesthatwealthdistributionamongtherichvariesdependingonthepercapitaincomelevels.In2021,thetop1%inthedevelopedcountriespossessed24%ofnationalwealth,whereasthecomparablestatisticsinthedevelopingcountrieswas42%.Besides,PikettyandZucman(2014)highlightedthatwealthinequalityasashareoftotalnationalwealthhasbeenontheriseinthelast40years.Theunevenpatternsofwealthdistributionandtheirmacroeconomicconsequenceswarrantaninvestigationofthemajordeterminantsofwealthinequalitywithinandacrosscountries.

Thecontributionsofourpapertotheexistingliteraturearetwofold.First,thisisthefirstempiricalanalysisexaminingtheroleofdigitaltrade(accountedbydigitallydeliverableservicestradeandICTgoodstrade),focusingexplicitlyonwithin-countrywealthinequalitylevels.Second,thesampleofourstudyincorporatescountriesintheAsiaPacificregionwherenospecificstudyonthenexusbetweendigitalisationandwealthinequalityhasbeencarriedoutbefore.Ouranalysisprovidesnewempiricalevidencethatdigitaltradehasaninequality-enhancingeffectintheAsiaPacificregion.Nevertheless,itisimportanttomentionthatthecurrentstudyislimitedtoaddressingwithin-countrywealthinequality,andhasnopotentialextensiontoaddresswealthinequalitybetweencountries.

Therestofthepaperisstructuredasfollows.Insection2,wepresentabriefreviewofthetheoreticalandempiricalliteratureontheeffectsofinternationaltradeoninequalityingeneral,andwealthinequalityinparticular.Wehighlighttheroleofdigitalisation,hithertoneglected,indrivingwithin-countryinequality.Section3presentsapreliminaryanalysisofdigitalisation,digitaltradeandwealthinequalityintheAsiaPacificregion.Section4discussesthedata,variables,andempiricalapproachadoptedinthepaper.Section5discussestheempiricalresultsindetail,followedbytheconclusionsandpolicyimplicationsinSection6.

3

ReviewofLiterature

2.1Theoreticalbackground

Theeffectofinternationaltradeinequalityhasbeenstudiedingreatdetailovertheyears,however,withoutreachingaconsensus.Moststudiesexaminethenexusbetweeninternationaltradeandinequalityagainstthebackgroundofneoclassicaltheories(Zhuetal.,2022).Increaseddigitalisationhasresultedinexpandedtradeinbothgoodsandservices(AbelianskyandHilbert,2017).Baldwin(2005)adoptedtheheterogeneousfirmmodelofMeltizandprovedthatonlinemarketshelpedindecreasingincomeinequalitybyreducingthefixedcostofexporting.LendleandOlarreaga(2017)studiedtheroleofonlinemarketsinmakinginternationaltrademoreinclusive,bybringingdownincomeinequality.Informationfrictionsarelessinonlinemarketssincethereisamuchsmallerneedtosearchforclientsortoestablishadistributionchannel,comparedtoofflinemarkets.Inonlinemarkets,thecostincurredbythesellerinfindingtherightcustomerisquitenegligible.Itisalsomuchcheaperforasellertobuildareputationonlineduetotheinbuiltmechanismsofferedbye-commercewebsites,whereincustomersgiveratingsofvariousonlinevendorsbasedontheirearlierpurchases.

Specificallyinthecontextofwealthinequality,internationaltrade,amongothers,isidentifiedasacriticaldeterminant(FoellmiandOechslin,2010;ChangandWu,2016).Therearenotabledirectchannelslinkingdigitaltradeandthedigitalisationoftradetowealthinequality.Forinstance,technologicalprogressintradecandrivewealthinequalitybecauseofitsin-builtskillsbias.Incontrast,digitalisationprovidesmoreopportunitiesforlower-incomegroupstogetmarketaccessbyloweringtransactioncosts(Zhuetal.,2022).Besides,thereareseveralindirectchannelsbywhichdigitalisationinfluencesinequalitylevelsinacountry.Thefirstofthemistheentrepreneurshipchannel.Itisarguedthatincreasingdigitalisationhasenabledexpandedbusinessopportunities(ZhangandLi,2018).However,thereexistsaparallelstreamofliteraturewhichpostulatesthatincreasedbusinessopportunitiescanincreasewithin-countryinequality(AtemsandShand,2018)byincreasingtheincomesoflargebusinessesandleavingsmallandmediumbusinesseswithrelativelylowershares.Thesecondindirectchannelisfinancialdevelopment.Increaseddigitalisationfacilitatesfinancialdevelopmentinacountry(Njangangetal.,2022)andthelatterinfluenceswealthinequalityintwoways.Ononehand,financialdevelopmentcoupledwithdigitalisationreducesinformationasymmetryinfinancialtransactions,therebyreducinginequalityamongdifferentincomeclasses.Ontheotherhand,financialdevelopmentmayfacilitatenewbusinessopportunitiesandwidenwealthdistributionbydisproportionatelyfavouringtherich.Thethirdindirectchannelisinnovationindigitalisation.Itisarguedthatdigitalisationpromotesinnovationamonglargeentrepreneurs,therebyreducingbusinessopportunitiesforsmallandmediumbusinesses(Njangangetal.,2022).

4

2.2EmpiricalEvidence

Eventhoughthereisalargebodyofempiricalliteratureonthenexusbetweeninternationaltradeandinequality,moststudiespredominantlyignoredtheroleofimprovementsindigitalisationininternationaltradeexceptZhuetal.(2022).Inarecentpaper,Zhuetal.(2022)studiedtheimpactofdigitalservicetradeonwithin-countryincomeinequality,forapanelof100countries.TheydefinedincomeinequalityintermsoftheGiniindexanddigitalservicetradeintermsofdigitallydeliverableservicestradeasashareofthetotalservicestradeofacountry.Usingtwo-stageleastsquares-instrumentvariableestimation,theyfoundthatdigitalservicetradehadanegativeandsignificantimpactonincomeinequality,inthecaseofhigh-incomeandmiddle-incomecountries.

Specifictowealthinequality,Islam(2018)arguedthatinternationaltradeandwealthinequalityareinverselyrelatedincountrieswithlowerlevelsofdemocracy.Onthecontrary,Tadadjeuetal.(2021)showedthattradeopennessincreaseswealthinequality,forasampleof45developedanddevelopingcountries.Njangangetal.(2022)studiedtheimpactofinformationandcommunicationtechnologyonwealthinequalityforapanelof45countries.TheyuseddifferentmeasuresofICTsuchasinternetpenetration,mobilepenetration,ICTserviceexports,ICTindex,ICTqualityandquantity.TheymeasuredwealthinequalityusingCreditSuissedataforthreeproxies,namely,thewealthshareofthetoponepercent,thewealthshareofthetoptenpercentandthebillionairewealthtoGDPratio.TheyfoundthatICTincreaseswealthinequality,withdemocracyplayinganimportantroleinmitigatingthisimpact.

Whiletheeffectsofinternationaltradeanddigitalisationhavebeenexaminedindependently,whetherandhowdigitaltradeaffectswealthinequalityremainsunexplored.Ourstudyproposestofillthisgap.ThestudygainsmorerelevanceintheprospectofachievingtheSDGofreducedinequality.TheAsia-Pacificregionprovidesasuitabletestinggroundforourstudysinceheightenedincomeandwealthinequalitieshaveaccompaniedrapideconomicgrowthinthisregion(Zhuang,2023).DigitallydeliverableservicestradeintheAsiaPacificregionexperiencedhighergrowththantherestoftheworldduringthefifteenyearsfrom2005to2020(ADB,2022).Theproliferationofdigitalisationinthepost-Covidperiodfurtheramplifiestheimportanceofdigitaltradeinshapinginequalitylevelswithinandacrosscountries(WangandXu,2023).

5

PreliminaryDataAnalysis

Insub-section3.1,wediscusstherecenttrendsindigitaltradeintheAsiaPacific3fortheperiod2005-20214.WeemploydigitallydeliverableservicestradeandICTgoodstradeasthebroadmeasuresofdigitaltrade.Inthesub-section3.2,weshowtheregionalevolutionofwealthinequalityovertheperiod1995to20215.Weusetheshareofwealthheldbythetop1percentileoftheadultpopulationandthetop10percentileoftheadultpopulationasbroadmeasuresofwealthinequality.

3.1DigitalTradeinAsiaPacific

Figure1throwslightonthedigitaltradepatternunfoldingwithintheAsiaPacificregion,andspecificallyamongtheESCAPmemberstates,forthelatestyearforwhichdataisavailable,namely,2021.DigitallydeliverableservicesareasuperiorindicatorofdigitaltradecomparedtoInformationandCommunicationTechnology(ICT)servicessinceitcoversamuchbroaderarrayofservicesexportsandservicesimportswithinitsambit.Digitallydeliverableservicesareanaggregationofinsuranceandpensionservices,financialservices,chargesfortheuseofintellectualproperty,telecommunications,computerandinformationservices,otherbusinessservicesandaudiovisualandrelatedservices(UNCTAD,2015).

DevelopedcountriessuchastheUnitedKingdomandtheUnitedStatesexhibitedthehighestshareofdigitallydeliverableservice(DDS)exportsintotalservicestrade,at85percentand77percent,respectively.,for2021(Figure1).AmongtheotherregionswithinAsiaPacific,SouthAsiaandSoutheastAsiaemergeasleadingplayersinthedigitalservicesexportmarket.InSouthAsia,comprisingofcountriessuchasIndia,aworldleaderinInformationTechnologyexports,DDSexportsasashareoftotalservicestrade,stoodat72percent.DDSexportsforEastAsia,despitehavingeconomicpowerhousessuchasChina,JapanandSouthKorea,formedonly53percentoftotalinternationaltradeinservicesoftheEastAsianregion.RussiaisoneofthebiggestcountriesintheAsiaPacificregionandhasstrategicpartnershipswithsmallercountriesintheregion.RussiaaswellastheOceaniaregion,whichincludesmanyislandnationsaswellasdevelopedcountriessuchasAustraliaandNewZealand,werefoundtobelagginginthedigitalservicesexportmarket.

340countriesoutof53UNESCAPmemberstates(givenin

/about/member

-states)havebeenincludedineconometricanalysis,duetodatalimitations.Thelistof40countriesaregivenintheAppendix.4Duetodataunavailability,welimitthestudyperiodto2005-2021.

5Onlywealthinequalityanalysisiscarriedoutforsuchalengthytimeperiod.RegionalevolutiondoesnotincludeUSA,UK,Turkey,TheNetherlands,andFrance.

6

Figure1:ExportPatternofDigitallyDeliverableServicesfor2021

DDSExports(as%oftotalservices

trade)

90

80

70

60

50

40

30

20

10

0

SEASAEAOCEAUSAUKRUS

Source:Authors’compilationfromUNCTADStat

Notes:SEA-SoutheastAsia,SA-SouthAsia,EA-EastAsia,OCEA-Oceania,USA-UnitedStatesofAmerica,UK-UnitedKingdom,RUS-RussianFederation6

Theregulatoryregimeondigitaltradehasimportantimplicationsforthewealthinequalityprevailinginacountry.Anopenregulatoryenvironmentmayreduceoraccentuatetheproblemofwealthinequality.TheDigitalServicesTradeRestrictivenessIndexpublishedbyOECD,quantifiesthecross-cuttingbarriersthatinhibitorcompletelyprohibittheabilityoffirmstosupplyserviceswhicharetradeddigitally(Ferencz,2019).Thisisacompositeindexcomprisingfivemajordimensions,namely,infrastructureandconnectivity,electronictransactions,e-paymentsystems,intellectualpropertyrightsandotherbarrierstotradeindigitallyenabledservices.Thevalueoftheindexvariesfrom0to1,with0indicatinganopenregulatoryenvironmentand1indicatingacompletelyclosedregulatoryenvironment.

6Forfigure1,SouthAsiaexcludesTurkey,SoutheastAsiaexcludesBruneiDarussalam,EastAsiaexcludesNorthKorea,andOceaniaexcludesAmericanSamoa,GuamandNorthernMarianaIslands,comparedtotheUNESCAPcountrygrouping.

7

Figure2:TrendsinDigitalServicesTradeRestrictiveness,2021(OECDcountriesofAsiaPacific)

DSTRIndex

0.300

0.250

0.200

0.150

0.100

0.050

0.000

AUSFRAJPNKORNLDNZLTURUKUSA

Source:Authors’compilationfromOECDStat

Notes:AUS–Australia,FRA–France,JPN-Japan,KOR–KoreaRepublic,NLD–TheNetherlands,NZL-NewZealand,TUR-Turkey,USA-UnitedStatesofAmerica,UK-UnitedKingdom.

AmongtheESCAPmemberstates,dataonthisindexisavailablefor25countries.AmongtheOECDCountrieswhichbelongtotheAsiaPacificregion,itisfoundthatTurkeyhasthemaximumamountoftraderestrictions,withaDSTRIof0.264intheyear2021,whenitcomestoengagingindigitaltrade(Figure2).ThemajorityofthebarrierstodigitalservicestradeforTurkey,SouthKoreaandNewZealandcanbeattributedtotheinfrastructureandconnectivitydimensionoftheindex.UK,USAandUSAhavethemostconduciveregulatoryenvironmentforfirmsengagingindigitalservicestrade,withaDSTRIof0.061.AllofthesenineOECDmembersarealsodevelopedcountries.

Figure3revealsthetrendsindigitalservicestraderestrictivenessforselectnon-OECDcountriesintheAsiaPacificregion,fortheyear2021.Kazakhstan,LaoPDR,RussiaandCambodiaarefoundtohaveahighlyunfavourableregulatoryregimeforengagingindigitaltrade.K