Digital Trade, Data Protection and EU Adequacy Decisions

Bernard Hoekman, Martina Ferracane and Erik van der Marel van der Marel

No 2023/37, RSCAS Working Papers from European University Institute

Abstract: Using a structural gravity model, we assess whether EU adequacy decisions on data protection areassociated with bilateral digital trade. Controlling for digital-relevant bilateral covariates, includingpreferential trade agreements and other binding data flow arrangements, we find that countriesthat received EU adequacy exhibit an increase in digital trade between 6-14 percent, representinga trade cost reduction up to 9 percent. This is mostly driven by the EU granting adequacy to theU.S., reflecting the dominance of the EU and U.S. in global digital trade. We also find that countriesthat have an EU adequacy determination exhibit greater digital trade among each other, suggestiveof a network or club effect. Complementary country-specific analysis of post-adequacy digital tradeperformance using synthetic control methods confirms the positive effects of adequacy.

Keywords: Digital trade; data protection; mutual recognition; equivalence; trade costs (search for similar items in EconPapers)
Date: 2023-06
New Economics Papers: this item is included in nep-eec
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cadmus.eui.eu/bitstream/handle/1814/75629/ ... quence=1&isAllowed=y (application/pdf)
https://hdl.handle.net/1814/75629 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rsc:rsceui:2023/37

Access Statistics for this paper

More papers in RSCAS Working Papers from European University Institute Convento, Via delle Fontanelle, 19, 50014 San Domenico di Fiesole (FI) Italy. Contact information at EDIRC.
Bibliographic data for series maintained by RSCAS web unit ().