The Political Economy of Digital Trade

• In Event: Digital Trade, Money, and Cybersecurity

Abstract

What explains variation in cross-border barriers in digital trade? While the world has become increasingly reliant on the digital flow of goods and services, a growing number of regulations limit cross-border data flows. Existing studies focus on privacy and security objectives but fail to explain the cross-country variation in the type and scope of digital regulations. In this paper, we argue that the commercial interests of the government and domestic industry protection, systematically shapes digital trade regulation. Using a newly created dataset of digital trade regulations in over 100 countries, we find that the type of commercial interests benefiting from digital barriers affects the type and scope of digital trade regulations. Our findings illustrate the emergence of a new digital battleground of multinational firms and host governments and implications for international cooperation on digital trade.

Authors

• Clara Park, Duke University

• Isha Banerjee, University of Colorado at Boulder