Digitalization and global power shifts: implications for cross-border data flows and digital FDI

Julien Chaisse

Chapter 2 in A Research Agenda for Global Power Shifts and International Economic Law, 2025, pp 43-82 from Edward Elgar Publishing

Abstract: This chapter examines how cross-border data flows and foreign investment interact in the digital age. It focuses on the regulatory pressures emerging around digital foreign direct investment, particularly where data governance, national security, and market access collide. The analysis maps key fault lines in the current treatment of digital FDI under international economic law, with attention to gaps, unresolved legal questions, and contested state practices. Instruments such as the United States–Mexico–Canada Agreement are used to illustrate how treaty-based rules are beginning to structure the flow of data-linked capital. The chapter argues that international legal cooperation is necessary, not only to ease the movement of data and investment across borders, but also to avoid fragmentation and policy deadlock. Without a credible approach to reconciling privacy, security, and openness, the global economy risks becoming more divided, not less. Progress will depend on coordination among governments, private actors, and international institutions.

Keywords: Digitalization; Cross-border data flows (CBDFs); Foreign direct investment (FDI); Central bank digital currencies (CBDCs); National security; Regulatory sovereignty; Global power shifts; Investor–state agreements (ISAs); Digital trade agreements (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035311491
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