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Understanding digital trade

Author

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  • Lilia Patrignani

    (Bank of Italy)

Abstract

The widespread adoption of digital technologies has significantly reshaped international trade, ushering in a new era of digitally-driven transactions. This study provides an overview of the literature on digital trade, exploring its definitions and measurement methods, its key influencing factors, and the challenges posed by fragmented digital regulations across jurisdictions. The paper highlights the growing importance of digital trade, which reached 25 per cent of global trade in 2020 according to OECD estimates. When focusing on cutting-edge digital services, like cloud computing and online advertising, the majority of exports originate from the US, while the EU's global presence remains limited. The growth of digital trade has been fuelled by the digitalization process, from the advent of the internet to the advancement of AI, alongside trade liberalization. However, recent years have seen a rise in barriers to digital trade, in the wake of growing international tensions and a fragmented regulatory landscape, potentially harming international trade.

Suggested Citation

  • Lilia Patrignani, 2024. "Understanding digital trade," Questioni di Economia e Finanza (Occasional Papers) 841, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_841_24
    as

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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2024-0841/QEF_841_24.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    digital trade; e-commerce; digital connectivity; trade agreements; data flows; digital fragmentation;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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