Modelling data localisation measures

Dorothee Flaig, Javier Lopez Gonzalez, James Messent and Marie-Agnès Jouanjean

No 332763, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Data localisation measures introduce digital ‘border controls’ through a combination of restrictions on cross-border data flows and/or local storage requirements. The implications of these are not well understood and raise new policy challenges related to balancing consumer protection in a way that preserves the significant economic and trade benefits flowing from data-enabled business. Using an adapted computable general equilibrium model (METRO), this paper aims to identify the transmission mechanisms associated with the opportunity costs of data localisation measures. To this end, it models a hypothetical scenario with a uniform policy shock across selected regions (selected for demonstrative purposes only). The results suggest that the opportunity costs of data localisation measures would be highest in countries most integrated into global value chains or with higher trade exposure. They also highlight the possibility for large spill-over effects. Countries which have strong trading ties with measure-implementing regions would witness equivalent or even larger negative effects on their economic activity, even when these have not put any data localisation measure in place.

Keywords: Research; Methods/Statistical; Methods (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332763

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