In the context of the rapid expansion of the digital economy, digital services trade has become a key driver of global trade growth. At the same time, an increasing number of countries have introduced regulatory restrictions on cross-border data flows, motivated by concerns related to national security, data sovereignty, and personal data protection. While such measures serve legitimate public interests, they may also impose legal and economic constraints on cross-border digital services trade.Focusing on member states of the Regional Comprehensive Economic Partnership (RCEP), this paper empirically examines the regulatory effects of cross-border data flow restrictions on digital services exports using panel data from 2014 to 2022. The results indicate that, overall, stricter data flow restrictions are associated with a significant reduction in digital services exports. The negative impact is more pronounced in developing economies and in jurisdictions that adopt data localization–oriented regulatory frameworks. Further analysis shows that improved digital infrastructure and participation in trade agreements can partially mitigate the trade-restrictive effects of data flow regulations. Heterogeneity analysis reveals that the impact of data flow restrictions varies according to regulatory design and levels of economic development.The findings remain robust across a series of robustness checks. From a legal and regulatory perspective, the results highlight the importance of adopting differentiated and proportionate approaches to cross-border data governance. Enhancing regulatory cooperation and aligning data flow rules within trade agreements such as RCEP may help reconcile data protection objectives with the facilitation of digital services trade.
Xiang Caifen (Wed,) studied this question.