Can data flow provisions facilitate trade in goods and services? —Analysis based on the TAPED database

Abstract

Data is a basic production factor in the digital economy era, and it creates value in the processes of flow, sharing, and processing. However, there are different attitudes toward data flow, and less attention has been paid to the impact of data flow provisions on international trade. Based on the Trade Agreements Provisions on Electronic-commerce and Data (TAPED) database, we evaluate the impact of data flow provisions on trade in goods and services. Our results show that the signing of provisions on the free flow of data plays a more significant role in promoting trade in services. This finding is robust to a wide range of tests, including parallel trend test, lagging one period, and placebo tests. Mechanism analysis shows that signing provisions on the free flow of data can promote the growth of goods trade by breaking through distance restrictions. From the perspective of trade in services, the effect of signing data free flow provisions varies according to the degree of Internet access in the destination country. In addition, data flow provisions have heterogeneous effects on international trade at the national and industry levels.