Digital readiness, distance, and bilateral imports : evidence from Uzbekistan

다국어 초록 (Multilingual Abstract)

This thesis explores whether digital readiness in partner countries helps increase Uzbekistan’s bilateral imports and whether it can reduce the negative effect of geographic distance on trade. The study is based on the idea that digital development, including better internet access and stronger digital infrastructure, can lower transaction costs and improve cross-border market access. At the same time, for a country like Uzbekistan, which is double-landlocked, physical distance and transport constraints still remain major barriers. This raises a central question: can digital readiness meaningfully reduce the trade costs associated with geography? To answer this question, the study uses an augmented gravity model of trade focused on Uzbekistan’s imports from partner countries. The analysis is based on panel data and applies the Poisson pseudo-maximum likelihood （PPML） estimator, which is well suited for trade data because it can better handle zero trade flows and heteroskedasticity. In addition to the standard gravity variables such as partner-country economic size and bilateral distance, the model also includes indicators of digital readiness and an interaction term between digital readiness and distance. The results show that higher digital readiness in partner countries is associated with stronger export performance to Uzbekistan. In other words, countries with better digital capacity tend to export more to the Uzbek market. However, the findings do not strongly support the view that digital readiness significantly reduces the negative effect of distance. Although digital development appears to support trade, it does not fully offset the structural disadvantages created by geography, transport dependence, and logistics constraints. This study contributes to the literature by examining digital trade and the gravity model from the perspective of a landlocked developing economy. It also offers a more careful view of the “digital bridge” argument. The findings suggest that digital readiness can support trade growth, but digital progress alone is not enough to overcome geography-based trade barriers. For Uzbekistan, this means that digital policies should be supported by improvements in transport infrastructure, customs efficiency, and trade facilitation in order to achieve broader trade gains.
This thesis explores whether digital readiness in partner countries helps increase Uzbekistan’s bilateral imports and whether it can reduce the negative effect of geographic distance on trade. The study is based on the idea that digital development, including better internet access and stronger digital infrastructure, can lower transaction costs and improve cross-border market access. At the same time, for a country like Uzbekistan, which is double-landlocked, physical distance and transport constraints still remain major barriers. This raises a central question: can digital readiness meaningfully reduce the trade costs associated with geography? To answer this question, the study uses an augmented gravity model of trade focused on Uzbekistan’s imports from partner countries. The analysis is based on panel data and applies the Poisson pseudo-maximum likelihood （PPML） estimator, which is well suited for trade data because it can better handle zero trade flows and heteroskedasticity. In addition to the standard gravity variables such as partner-country economic size and bilateral distance, the model also includes indicators of digital readiness and an interaction term between digital readiness and distance. The results show that higher digital readiness in partner countries is associated with stronger export performance to Uzbekistan. In other words, countries with better digital capacity tend to export more to the Uzbek market. However, the findings do not strongly support the view that digital readiness significantly reduces the negative effect of distance. Although digital development appears to support trade, it does not fully offset the structural disadvantages created by geography, transport dependence, and logistics constraints. This study contributes to the literature by examining digital trade and the gravity model from the perspective of a landlocked developing economy. It also offers a more careful view of the “digital bridge” argument. The findings suggest that digital readiness can support trade growth, but digital progress alone is not enough to overcome geography-based trade barriers. For Uzbekistan, this means that digital policies should be supported by improvements in transport infrastructure, customs efficiency, and trade facilitation in order to achieve broader trade gains.

국문 초록 (Abstract)

본 연구는 교역 상대국의 디지털 준비도（digital readiness）가 우즈베키스탄의 양자간 수입에 어떠한 영향을 미치는지, 그리고 이러한 디지털 준비도가 지리적 거리로 인한 무역 제약을 완화할 수 있는지를 실증적으로 분석하였다. 특히 우즈베키스탄이 이중 내륙국이라는 점에 주목하여, 디지털 발전이 물리적 거리와 운송 제약에서 발생하는 무역비용을 실제로 줄일 수 있는지를 검토하였다.
이를 위해 본 연구는 우즈베키스탄의 교역 상대국으로부터의 수입 자료를 바탕으로 확장된 중력모형（augmented gravity model）을 설정하고, 0의 무역흐름과 이분산성 문제를 고려할 수 있는 포아송 의사최우도법（PPML）을 적용하였다. 주요 설명변수로는 교역 상대국의 디지털 준비도 지표를 사용하였으며, 거리 변수와의 상호작용항을 통해 이른바 디지털 가교（digital bridge） 가설을 검증하였다.
분석 결과, 교역 상대국의 디지털 준비도가 높을수록 우즈베키스탄의 수입은 증가하는 경향을 보였다. 이는 디지털 준비도가 우즈베키스탄에 대한 수출 확대와 정（+）의 관련성을 가진다는 점을 보여준다. 그러나 디지털 준비도와 지리적 거리의 상호작용은 거리의 부정적 효과를 완화한다는 가설을 지지하지 않았다. 즉, 디지털 발전은 무역 확대를 일정 부분 지원할 수 있지만, 이중 내륙국이 직면한 물류 제약, 운송 경로 의존성, 통관 비효율과 같은 구조적 한계를 충분히 상쇄하지는 못하는 것으로 나타났다.
본 연구는 내륙 개발도상국의 관점에서 디지털 무역의 효과를 보다 신중하게 검토하였다는 점에서 의의를 가진다. 결론적으로 우즈베키스탄의 무역 확대를 위해서는 디지털 전환 정책만으로는 충분하지 않으며, 교통 인프라 개선, 통관 효율화, 무역원활화 조치가 함께 추진될 필요가 있음을 시사한다.

목차 (Table of Contents)

• Abstract i
• Table of content iii
• List of Tables v
• List of Figures vi
• List of Abbreviations vii
• I. INTRODUCTION 1
• 1.1 Background 1
• 1.2 Problem Statement 2
• 1.3 Research Aim and Objectives 3
• 1.4 Research Questions and Hypotheses 3
• 1.5 Significance and Contribution of the Study 4
• 1.6 Scope, Definitions, and Limitations 4
• II. LITERATURE REVIEW AND THEORETICAL FRAMEWORK 5
• 2.1 Trade Theory Foundations and the Digital Economy 5
• 2.2 The Gravity Model of Imports in the Digital Era 7
• 2.3 Transaction Cost Economics and E-commerce Mechanisms 11
• 2.4 Empirical Evidence: Digital Readiness, E-commerce, and Trade Outcomes 12
• 2.5 Gaps in the Literature and Theoretical Integration 13
• 2.6 Chapter Summary and Link to Chapter 3 15
• III. EMPIRICAL METHODOLOGY AND DATA IDENTIFICATION 15
• 3.1 Introduction 15
• 3.2 Conceptual and Theoretical Framework 16
• 3.3 Econometric Strategy 18
• 3.4 Data and Variable Construction 20
• 3.5 Inference and Robustness 25
• 3.6 Summary 25
• IV. EMPIRICAL RESULTS AND DISCUSSION 26
• 4.1 Chapter Overview 26
• 4.2 Descriptive Statistics and Preliminary Observations 29
• 4.3 Baseline Gravity Results 35
• 4.4 Digital Variables and Impact on Imports （Uzbekistan） 38
• 4.5 Digital Readiness and the Persistence of Distance 40
• 4.6 Heterogeneity Analysis: Where the Interaction Is Most Binding 45
• 4.7 Synthesis of Findings and Link to Chapter 5 48
• V. CONCLUSIONS AND POLICY IMPLICATIONS 50
• 5.1 Chapter Overview 50
• 5.2 Interpretation of the Empirical Findings 54
• 5.3 Structural Constraints and Disadvantages of Digital Integration 57
• 5.4 Contributions and Policy Implications 59
• 5.5 Limitations and Directions for Future Research 60
• 5.6 Conclusion 62
• References 63
• 국 문 초 록 66
• Acknowledgement 68