The Role and Impact of Cross-Border Data Flows in International Business Digital Trade

Abstract

Abstract Data is an important production factor in the era of the digital economy, and cross-border data flow is a prerequisite for digital trade. The Digital Services Trade Restrictiveness Index (DSTRI) is the basis of this paper’s research on the impact of cross-border data flow on digital trade. Firstly, cross-border data flow and digital trade are refined into cross-border data flow restrictive measures and digital service trade, and the mechanism of cross-border data flow restriction on digital service trade is investigated. Then, the impact model is constructed based on the gravity expansion model, the variable selection is carried out, the model variables are tested from the perspective of Pearson correlation and multicollinearity, and the optimal regression model is selected. Finally, baseline regression results are derived based on the model, and heterogeneity analysis and robustness tests are conducted. Cross-border data flow restrictions have a correlation coefficient of −2.176 with total digital services, and they have both negative and positive effects on the total trade in digital services. The total trade in digital services in DSTRI is negatively impacted by all policy areas of restrictions, which suggests that restrictions in any policy area can hinder the development of digital trade. When conducting the robustness test, cross-border data flow restrictions still have a significant inhibitory effect on digital services trade, which is consistent with the results of the benchmark regression, indicating that the results of the benchmark regression in this paper are reasonable and valid.