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As the foundation and driver of digital trade development, can digital infrastructure empower China to secure greater digital trade gains? Using a trade in value-added framework to calculate digital trade gains, this study empirically examines how digital infrastructure affects digital trade gains and the underlying mechanisms. The findings indicate that improvements in bilateral digital infrastructure bolster China’s digital trade gains from partners, operating through two channels: reducing bilateral trade costs and boosting innovation. Heterogeneity analysis reveals that digital infrastructure enables China to gain more when trading with geographically close partners, highly economically developed partners and linguistically similar partners. This study identifies digital infrastructure as a key driver of digital trade gains, providing insights to support China in securing such gains through strengthening digital infrastructure construction and connectivity with key partners.
Wang et al. (Mon,) studied this question.