Using a global panel of bilateral digitally delivered services exports for 192 economies from 2006 to 2022, together with large-scale international news data, this study examines the impact of international media sentiment on digital service exports, with particular attention to the institutional-barrier channel. To address the temporal aggregation mismatch between high-frequency media sentiment and annual trade flows, as well as potential endogeneity concerns, we employ a Mixed Two-Stage Least Squares (M2SLS) approach. The results show that more favorable international media sentiment has a positive and statistically significant effect on digital service exports. This finding remains robust across a range of measurement checks, placebo tests, alternative instrument constructions, subsample analyses, and Bayesian estimation. Further analysis supports an institutional-barrier interpretation by showing that favorable media sentiment is associated with lower bilateral digital service trade policy heterogeneity. The impact is stronger in trust- and reputation-intensive service sectors and in cultural contexts where reputational signals are more salient, while it weakens or reverses in technical service sectors and in highly secular-rational and institutionally asymmetric trading relationships.
Guo et al. (2026) studied this question.