A Study on the Competitiveness and Influencing Factors of the Digital Service Trade

Abstract

In today’s digital era, the rapidly escalating digital service industry plays a crucial role in the country’s economic development. However, compared to the countries that are a part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the competitiveness level of China’s digital service trade still needs to be improved. This paper aims to know the differences in the competitiveness of the digital service trade between China and CPTPP countries and explore the factors affecting competitiveness in both exports and imports to improve China’s competitiveness level and narrow the gap with CPTPP, thereby promoting its accession process. This paper first uses China and CPTPP countries’ 2010–2022 import and export volume of digital service data to calculate each country’s revealed comparative advantage index, trade competitiveness index, market share, and Michaely fluctuation index indicators, further comparing the comprehensive level of competitiveness between countries. Then, based on the diamond theory, multiple regression analyses will be conducted based on the factors influencing digital service trade competitiveness and using the indicator data of influencing factors in each country for 2010–2021. The conclusions show that China’s digital service trade competitiveness ranked relatively high among CPTPP countries. The competitiveness of imports and exports of the digital service trade is influenced positively by several factors, including the degree of trade freedom, government efficiency, the number of fixed broadband subscriptions per 100 people, and the industry’s openness. The value of exports of trade in goods has a positive effect on export competitiveness, the enrolment rate in tertiary education has a positive effect on import competitiveness, and the ratio of employed in the service sector to the total employed has a dual effect, facilitating export competitiveness and inhibiting import competitiveness.