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Of bytes and trade: Quantifying the impact of digitalisation on trade

Author

Listed:
  • Javier López González
  • Silvia Sorescu
  • Pinar Kaynak

Abstract

This paper provides an overview of the evolving nature of digital trade and digital trade policies. It shows that digital trade has been growing faster than “non-digital” trade. By 2018, 24% of global trade (USD 5.1 trillion) could be considered digital trade. In parallel, countries have embraced digital trade provisions in trade agreements and new digital economy agreements have emerged. The empirical analysis shows that growing digital connectivity delivers a double dividend, increasing both domestic and international trade. It also shows that digital trade chapters have the potential to double the effect of trade agreements, while reductions in domestic barriers affecting digital trade have a strong export-enhancing effect, particularly in digitally-deliverable services. Overall, the results suggest that digital connectivity and digital trade policies play a significant and growing role in reducing trade costs and increasing trade across countries at all levels of development. The paper calls for wider participation and ambition in discussions at the WTO.

Suggested Citation

  • Javier López González & Silvia Sorescu & Pinar Kaynak, 2023. "Of bytes and trade: Quantifying the impact of digitalisation on trade," OECD Trade Policy Papers 273, OECD Publishing.
    • Handle: RePEc:oec:traaab:273-en
    DOI: 10.1787/11889f2a-en
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    Citations

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    Cited by:

    1. Lilia Patrignani, 2024. "Understanding digital trade," Questioni di Economia e Finanza (Occasional Papers) 841, Bank of Italy, Economic Research and International Relations Area.
    2. Viktor Stojkoski & Philipp Koch & Eva Coll & César A. Hidalgo, 2024. "Estimating digital product trade through corporate revenue data," Nature Communications, Nature, vol. 15(1), pages 1-15, December.
    3. Irina Korgun & Altin Hoti, 2023. "Dynamics of Bilateral Digital Trade: The Case of a Korea–EU Digital Partnership," Economies, MDPI, vol. 11(10), pages 1-14, October.

    More about this item

    Keywords

    Data Flows; Digital connectivity; Digital trade; E-commerce; Trade agreements; Trade costs;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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