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Modelling data localisation measures

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  • Flaig, Dorothee
  • Lopez Gonzalez, Javier
  • Messent, James
  • Jouanjean, Marie-Agnès

Abstract

Data localisation measures introduce digital ‘border controls’ through a combination of restrictions on cross-border data flows and/or local storage requirements. The implications of these are not well understood and raise new policy challenges related to balancing consumer protection in a way that preserves the significant economic and trade benefits flowing from data-enabled business. Using an adapted computable general equilibrium model (METRO), this paper aims to identify the transmission mechanisms associated with the opportunity costs of data localisation measures. To this end, it models a hypothetical scenario with a uniform policy shock across selected regions (selected for demonstrative purposes only). The results suggest that the opportunity costs of data localisation measures would be highest in countries most integrated into global value chains or with higher trade exposure. They also highlight the possibility for large spill-over effects. Countries which have strong trading ties with measure-implementing regions would witness equivalent or even larger negative effects on their economic activity, even when these have not put any data localisation measure in place.

Suggested Citation

  • Flaig, Dorothee & Lopez Gonzalez, Javier & Messent, James & Jouanjean, Marie-Agnès, 2016. "Modelling data localisation measures," Conference papers 332763, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332763
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    File URL: https://ageconsearch.umn.edu/record/332763/files/8275.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Potluri, Sai Rakshith & Sridhar, V & Rao, Shrisha, 2020. "Effects of data localization on digital trade: An agent-based modeling approach," Telecommunications Policy, Elsevier, vol. 44(9).
    3. Lim, Jing Zhi & Toh, Mun-Heng & Xie, Taojun, 2022. "Impact of Digital Economy Agreements on ASEAN Development: Estimates from a CGE Model," Conference papers 333441, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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