The Impact of Deepening Digital Trade Rules on the Upgrading of Trade Structure in Developing Countries

Abstract

The digital technological revolution has reshaped global trade rules, with all countries racing to formulate digital trade regulations. Existing research mostly adopts the perspective of the world or developed economies, while paying insufficient attention to the impacts on developing countries. Based on the perspective of developing countries, this paper studies how the deepening of digital trade rules affects the upgrading of their trade structures. By sorting out the course of developing countries’ participation in global digital service trade governance, this paper constructs an indicator to measure the depth of digital trade rules and conducts empirical analysis based on a cross-border dynamic panel data model. The study finds that the deepening of digital trade rules significantly boosts the development of digital service trade in developing countries, thereby driving the upgrading of their trade structures, and this effect is more pronounced in high-income developing countries. Mechanism analysis shows that the deepening of rules realizes structural upgrading mainly through two paths: cutting trade costs and elevating regulatory standards. Accordingly, suggestions are put forward for developing countries: take an active part in global governance, prioritize the formulation of cross-border data flow rules, strengthen the construction of domestic digital infrastructure and laws related to data classification, and seize opportunities to realize the upgrading of trade structures.