The Role of Domestic and Foreign Digital Inputs in Enhancing Service Export Sophistication

Developing effective strategies to enhance service export sophistication is critical for countries, particularly as digital technologies fundamentally transform service trade. Yet existing studies have not explored how domestic and foreign digital inputs shape this sophistication and their underlying mechanisms. Using 2000–2014 cross-national panel data, this study examines their impacts. Results demonstrate that both inputs boost sophistication by reducing traditional factor dependence and optimizing export structures, with foreign inputs exhibiting stronger structural optimization effects. Particularly, domestic inputs further enhance sophistication through improved factor allocation efficiency. These findings yield significant theoretical and policy insights for advancing service trade digitalization.