This study examines the impact of exchange rate volatility on digital services exports and explores how global uncertainty, digital trade policy, and ICT adoption influence this relationship. Using a gravity model estimated with the Poisson Pseudo-Maximum Likelihood (PPML) method, the analysis employs an unbalanced panel dataset of 72 countries over 2014–2023. The results show that exchange rate volatility significantly reduces digital services exports, highlighting the sensitivity of digitally deliverable transactions to currency instability. Moreover, global uncertainty amplifies this negative effect, particularly when both exporting and importing countries experience heightened uncertainty. The findings also reveal that digital trade agreements play a stabilizing role by mitigating the adverse impact of exchange rate volatility. In addition, greater similarity in ICT adoption between trading partners can weaken the negative effect of exchange rate volatility, suggesting that comparable digital environments can reduce the vulnerability of digital trade to financial shocks. These results imply that maintaining exchange rate stability, strengthening digital governance, expanding digital trade agreements, and promoting broader ICT adoption are important policy measures to support the resilience and growth of cross-border digital services trade.
Nga et al. (Sat,) studied this question.