Digital infrastructure and services trade in the CEFTA region

The aim of this paper is to provide exploratory evidence on the effects of the digital economy on the economic development of cross border services trade in the CEFTA parties. The paper first gaugesthe extent and usage of internet infrastructure in the region. It then identifiesthe role of the digital economy in explaining the growth of exports of services in the Western Balkan economies and explores the barriers to providing services exports through ecommerce. We find that the digital economy is making a significant contribution to services exports in the region, but that several substantial barriers hinder the achievement of its full potential. These include poor infrastructure, slow broadband speeds and limited bandwidth, the regulatory environment, geo-blocking and a lack of skills in the use of online technologies. In regard to the latter, the opportunities and financing for internet training and the development of internet skills is insufficient and problematic.