ABSTRACT

This article examines the relationship between ICT services trade, digital adoption, employment, and labour productivity in advanced and developing economies. The analysis uses panel data for 100 economies from 2006 to 2024, comprising 31 advanced and 69 developing economies classified according to the IMF World Economic Outlook. The empirical approach applies fixed-effects panel regressions with country and year effects, country-clustered robust standard errors, and inverse hyperbolic sine transformations. Separate models are estimated for advanced and developing economies using two dependent variables: the employment-to-population ratio and GDP per person employed. The results reveal substantial differences between the two country groups. In advanced economies, ICT services exports and Internet use are positively associated with employment, while ICT-related variables show no stable relationship with labour productivity. In developing economies, ICT services exports and imports are not statistically significant in either model. However, Internet use is negatively associated with employment and positively associated with labour productivity, suggesting that digital adoption may support productivity-enhancing transformation while contributing to labour-market restructuring. Robustness checks excluding GDP per capita and using one-year lags confirm the consistent role of Internet use. By contrast, ICT services imports show no robust association with either employment or productivity. The findings underline the importance of distinguishing between ICT services trade and broader digital adoption when assessing labour-market and productivity outcomes.