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Do data policy restrictions inhibit trade in services?

Author

Listed:
  • Erik Marel

    (ECIPE, Université Libre de Bruxelles & ECARES)

  • Martina Francesca Ferracane

    (European University Institute (EUI))

Abstract

This paper examines whether restrictive data policies are related to trade in services. The authors have collected comparable information on a variety of policy measures that regulate data for a wide group of countries for the years 2006–2016. This information is compiled in a weighted index that assesses the restrictiveness of these countries’ data policies. They distinguish between policies regulating the cross-border movement of data and policies regulating the domestic use of data. Using econometric estimations, they show that strict data policies are negatively and significantly associated with imports of data-intense services. Therefore, countries applying restrictive data policies, in particular with respect to the cross-border flow of data, are likely to suffer from lower levels of services traded cross-border. The results of this analysis are significant and hold for various robustness checks.

Suggested Citation

  • Erik Marel & Martina Francesca Ferracane, 2021. "Do data policy restrictions inhibit trade in services?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(4), pages 727-776, November.
    • Handle: RePEc:spr:weltar:v:157:y:2021:i:4:d:10.1007_s10290-021-00417-2
    DOI: 10.1007/s10290-021-00417-2
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    3. Herman, Peter R. & Oliver, Sarah, 2023. "Trade, policy, and economic development in the digital economy," Journal of Development Economics, Elsevier, vol. 164(C).
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    7. Bellucci, Chiara & Rubínová, Stela & Piermartini, Roberta, 2023. "Better together: How digital connectivity and regulation reduce trade costs," WTO Staff Working Papers ERSD-2023-07, World Trade Organization (WTO), Economic Research and Statistics Division.
    8. Bernard Hoekman & Martina Ferracane & Erik van der Marel van der Marel, 2023. "Digital Trade, Data Protection and EU Adequacy Decisions," RSCAS Working Papers 2023/37, European University Institute.
    9. Fredrik Erixon & Oscar Guinea, 2024. "From Compliance to Constraint: How Digital Regulation Impacts Productivity and Innovation in Europe," EconPol Forum, CESifo, vol. 25(06), pages 18-21, November.
    10. Gupta, Shagufta & Ghosh, Poulomi & Sridhar, V., 2022. "Impact of data trade restrictions on IT services export: A cross-country analysis," Telecommunications Policy, Elsevier, vol. 46(9).
    11. Lijuan Yang, 2023. "Recommendations for metaverse governance based on technical standards," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.

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    More about this item

    Keywords

    Trade; Services; Data flows; Digital technology; Regulations;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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