Balancing Openness and Protection:Homogenization of Regulatory Laws in Digital Service Trade

Yang Cuihong, Wang Xiaolin, Wang Huijuan and Xia Yan ()
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Yang Cuihong: Academy of Mathematics and Systems Science, Chinese Academy of Sciences (CAS) Beijing China
Wang Xiaolin: Academy of Mathematics and Systems Science, Chinese Academy of Sciences (CAS) Beijing China
Wang Huijuan: School of Statistics and Mathematics, Central University of Finance and Economics Beijing China
Xia Yan: Institutes of Science and Development, CAS Beijing China

China Finance and Economic Review, 2024, vol. 13, issue 2, 67-89

Abstract: Digital service trade has emerged as a pivotal engine for global economic transformation and development. However, the implementation of differentiated regulatory measures for trade in digital services among economies has led to increasingly frequent trade disputes. This paper constructs a regulatory homogeneity network for digital service trade in 60 major economies, and systematically evaluates the structural characteristics of the network and the regulatory homogeneity among economies from 2014 to 2021. Furthermore, this paper empirically examines the impact of the partnership characteristics of regulatory homogenization in the network of major economies on their exports. The analysis of the network structure shows that major economies are more inclined to optimize and simplify existing trade partnerships, and are moving towards more diversified restrictive measures in the regulatory model of digital services trade, which has led to the rise of trade protectionism. The empirical text results show that expanding and deepening the regulatory homogeneous partnership of trade in digital services promotes the export of digital services in major economies. This promotion effect is mainly achieved by reducing the cost of digital service trade and enhancing business trust. In addition, the export promotion effect of developing regulatory homogenization partnerships is better than that of increasing the openness of digital service trade, and the homogenization of policies between openness and protection is more important. This paper provides important implications for coordinating the openness and security of digital services trade: China should actively cooperate with multilateral and bilateral digital service trade partners to jointly build a homogeneous environment for regulatory regulations. In particular, it is necessary to deepen the regulatory homogeneity partnership with Asian and developing economies to expand the influence of the “China model” in the global regulation of digital services trade.

Keywords: digital service trade; regulatory cooperation; regulatory homogenization partnerships; high-quality trade development (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:cferev:v:13:y:2024:i:2:p:67-89:n:1004

DOI: 10.1515/cfer-2024-0010

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