Impact of Information Technology on International Trade

Topic: Trading
Words: 1392 Pages: 5

The technological advancements over the past decades have propelled many spheres forward and enabled businesses to embrace more effective ways of handling their operations. The emergence of affordable and user-friendly computers, as well as the creation of electronic payment systems, enhanced commerce worldwide. The field of international trade is among the main industries significantly impacted by information technology. Specifically, the facilitation of communication brought by technology entailed a more efficient exchange among merchants and companies, which positively impacted trading activities globally. At the same time, there have been many other effects of the rise of information technology in the sphere of international trade.

Information technology has greatly improved global trade and introduced a variety of new opportunities for stakeholders of international commerce. During the period between 1996 and 2008, the annual growth rate of Internet subscriptions was more than 10% which demonstrates the extensive use of telecommunication technology in modern societies (Rymarczyk, 2021). Communication facilitated by technology has made it easier and less expensive for people and businesses to interact. As a result, such developments impacted the economic sphere, for instance, research shows that the rapid digitization of economic processes led to a reorganization of economic activities. Technology enabled economic actors to rely on faster real-time communication, thus allowing them to conduct negotiations quickly. The rise of the Internet also increased the visibility of various suppliers and merchants and negated the geographical distance between potential business partners. It is now fairly easy to discover different sellers and buyers in foreign markets due to the transparency presented by the Internet. Therefore, physical geography is no longer an important factor in contemporary international trade since it has been largely replaced by digital networks.

The shift toward digital communication has contributed to the creation of new international trade networks due to several reasons. First of all, digital networks today let businesses and suppliers connect in a fast way and almost at no cost removing the need for prolonged searches, which were common before the information technology advancements. Additionally, companies that participate in global trading activities find it easier to monitor their employees using the new technologies and equipment, which results in fewer control costs and less management. Similarly, the state-of-art software available on the market makes it possible to reduce shipping costs by choosing the least expensive routes and controlling the entire transportation process. Thus, it becomes clear that the rise in technologies has facilitated the sphere of international trade and offered new opportunities to all stakeholders. Suppliers, shipping companies, and buyers gained the capacity to conduct their operations faster and with lower expenses. Based on the information presented above, it is possible to state that there is a positive relationship between global trade and information technology, and the trend is likely to continue in the future.

At the same time, information technology has had a positive impact on economic and product development, the essential driving forces of international trade. To determine the correlation between information technology and economic growth, researchers utilized different metrics, including the number of installed information and communications technology devices. Studies show that information technology has had a positive effect on economic productivity and growth both in industrialized countries and developing nations (Wang & Choi, 2018). Such evidence proves that digitalization is a positive trend that benefits all countries irrespective of their initial level of economic development. The growth in the sphere of economy allows nations to increase their international trading activities by exporting more products, and digitalization plays a major role in it. Internet penetration is the primary metric used to identify the relationship between information technology and countries’ international trade involvement. Studies demonstrate a significant link between information technology and export performance. For example, there is research showing a positive impact of the number of people using the Internet on trade between developing and developed countries (Ahmedov, 2020). Thus, there is a positive relationship between information technology and export.

The research makes it possible to identify existing links between digitalization and international trade by using basic data such as the use of mobile phone subscriptions, personal computers, and the Internet. The pairs of nations with high rates of adoption of the aforementioned elements tend to engage more actively in trade with each other. It is possible to assume that the extensive utilization of information technology devices and solutions lets people conduct business with individuals and companies abroad more easily. Other important metrics are allowing one to trace the impact of digitalization on international trade. For instance, the technological achievement index (TAI) is often used, which assesses four indicators, including technological innovation level, diffusion of old and recent innovations, and a human skills index. There has been identified a positive relationship between export and technological innovations (Gravili et al., 2018). There is also evidence that information technology and a favorable business regulatory environment have a considerable impact on the export performance of developing countries (Liu, 2017). Therefore, it is possible to state that information technology in developing countries may require additional factors to be a driver of international trade.

Information is a factor in the sphere of international trade, and it is clear that modern technologies make it more widely available. For instance, the data on the potential partners for exporting or importing goods, the established custom provisions, the current standards in each country, and consumer preferences can be easily accessed using the Internet. As a result, online platforms constitute a major actor in the work of importers, exporters, consumers, and manufacturers (Abeliansky & Hilbert, 2017). Such platforms serve as a means to address information asymmetries concerning the quality of products and the reliability of providers. Thus, information technology in the form of specialized Internet-based platforms increases trust among international trade stakeholders and lets them find partners more easily. For instance, platforms such as act as intermediaries between sellers and buyers, providing them with a place where they can participate in international trade while being protected. Similarly, there are many websites containing ratings of buyers and sellers as well as recommendations and feedback helping others to discover trusted partners. Such websites and platforms facilitate international trade and make it accessible to businesses that previously did not have such opportunities.

At the same time, global Internet-based platforms provide individuals with a chance to purchase products from overseas without any barriers. Previously, it was difficult for an average person to buy goods from merchants from foreign countries. As a result, the sphere of international trade was dominated by various intermediary companies. Information technology has made it possible for people to obtain products from foreign sellers directly using services such as Amazon, eBay, and many other similar platforms (Xing, 2018). They connect sellers and buyers worldwide, and the sphere of eCommerce is growing substantially every year, and the trend will likely stay the same in the future. Information technology also translated into the creation of payment processing services with low transaction costs. Subsequently, online platforms are starting to turn into the largest markets for international trade. For instance, many global corporations have already created their online stores on platforms such as Amazon, which enabled them to sell their products to a larger international clientele. Nevertheless, international trading happening outside of the major eCommerce platforms also extensively relies on modern information technology.

International trade is one of the spheres which have been significantly impacted by the growth of information technology. For instance, the emergence of the Internet and electronic payment services has reduced costs for all stakeholders engaged in international trade. Additionally, the fast transfers of relevant data over digital networks enabled people and companies to overcome information asymmetries. Thus, information technology has made global trade more transparent and provided stakeholders with opportunities to easily discover trustworthy partners. Studies demonstrate that countries with higher rates of adoption of information technology have larger economic growth and better export performance. The information technology advancements also contributed to the creation of special software and hardware, allowing companies to facilitate their operations. Billions of consumers around the world now have access to online platforms letting them purchase products directly from international sellers without the involvement of any parties, which was essential previously. Thus, based on the research and data, it is possible to state that information technology has had a major impact on the sphere of international trade and changed it forever, making it easier and faster.


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Ahmedov, I. (2020). The impact of digital economy on international trade. European Journal of Business & Management Research, 5(4), 1–7.

Gravili, G., Benvenuto, M., Avram, A., & Viola, C. (2018). The influence of the digital divide on big data generation within supply chain management. The International Journal of Logistics Management, 29(2), 592–628.

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