A Study on The Impact of Cross-Border Data Flow Restrictions on The Efficiency of China's Digital  Services Trade Exports

BiJun Liu

doi:10.63313/EBM.9180

Authors

BiJun Liu Department of International Business, Foshan University, Foshan, China Author

DOI:

https://doi.org/10.63313/EBM.9180

Keywords:

Cross Border Data Flow Restrictions, Digital Services Trade, Export Efficiency, Stochastic Frontier Gravity Model

Abstract

This study first reviews the cross-border data flow restriction policies of various countries and the export situation of China's digital service trade. Using panel data from 2014 to 2023, a stochastic frontier digital gravity model is constructed to measure the export efficiency of China's digital service trade. The results show that the export efficiency of China's digital service trade remains at a relatively low level with slow growth. To explore the impact of cross-border data flow restrictions on China's digital service trade export efficiency, a trade inefficiency model is constructed for regression analysis, yielding the following conclusions: Increased levels of cross-border data flow restrictions significantly inhibit China's digital service trade export efficiency. The improvement in internet development levels of destination countries can mitigate the negative impact of their cross-border data flow restriction policies on China's digital service trade export efficiency; however, the expansion of institutional distance between the two sides exacerbates this negative effect. Specifically, policies in infrastructure connectivity, electronic transactions, payment systems, and intellectual property rights all exhibit significant inhibitory effects, with intellectual property royalties and the personal, cultural, and entertainment services sectors being more sensitive to cross-border data flow restriction policies.

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