Digital Readiness and Telecommunication Equipment Imports: Evidence from China-Indonesia Trade Activity

Abstract: This study examines the important impact of digital technology development in Indonesia towards its import value of Chinese telecommunication equipment over the 20 years period, from 2004 to 2023. With the Comparative Advantage Theory and Technology Gap Theory as the theoretical base, this study explore on how the digital readiness is influencing the trade patterns between China and Indonesia, especially with the technological advancement in China for its telecommunication sector. The annual time series data are obtained from the UN Comrade database, World Bank, and national sources from Indonesian government sites. These data are analyzed with the OLS regression model with Newey-West HAC standard errors. The results indicates that mobile cellular subscriptions and broadband internet penetration have positive and statistically significant effects on the import value of telecommunication equipment import to Indonesia, which suggest that improvement in the digital readiness increase the demand of imported telecommunication equipment. In contrast, the digital patent activity in Indonesia shows a negative and significant relationship towards the import value, which indicating that there is a substitution effect for the imported products as the domestic innovation improves. The findings of this research contribute towards the digital trade literature by examining the multidimensional effects from the digital technology advancement towards the imports relating to technological products. Keywords: China-Indonesia Trade, Digital Infrastructure, Digital Readiness, Digital Technology Development, Import Dependence, Import Value, OLS Regression, Telecommunication Equipment. Title: Digital Readiness and Telecommunication Equipment Imports: Evidence from China-Indonesia Trade Activity Author: Regina Grace, Yang Ling International Journal of Novel Research in Marketing Management and Economics ISSN 2394-7322 Vol. 12, Issue 3, September 2025 - December 2025 Page No: 39-46 Novelty Journals Website: www.noveltyjournals.com Published Date: 18-December-2025 DOI: https://doi.org/10.5281/zenodo.17973058 Paper Download Link (Source) https://www.noveltyjournals.com/upload/paper/Digital%20Readiness%20and%20Telecommunication-18122025-1.pdf