IDEAS home Printed from https://ideas.repec.org/a/bla/reviec/v33y2025i3p796-814.html
   My bibliography  Save this article

Better Together: How Digital Connectivity and Regulation Reduce Trade Costs

Author

Listed:
  • Chiara Bellucci
  • Stela Rubínová
  • Roberta Piermartini

Abstract

Digital connectivity enhances international trade by reducing trade costs, including search frictions, language barriers, and other transaction costs. It is particularly transformative for services trade, where digital delivery enables cross‐border trade in numerous sectors. Using comprehensive estimates of trade costs across 58 economies and 23 sectors, our analysis reveals that a 10 percentage point increase in connectivity reduces trade costs by an average of 2% in both goods and services sectors. Notably, the positive effects are significantly larger in economies with digital regulations that ensure open access to communications infrastructure and facilitate freer cross‐border data flows, especially for digitally deliverable services. Hence, for the trade benefits to materialize, the adoption of digital technologies needs to be supported by an open regulatory regime.

Suggested Citation

  • Chiara Bellucci & Stela Rubínová & Roberta Piermartini, 2025. "Better Together: How Digital Connectivity and Regulation Reduce Trade Costs," Review of International Economics, Wiley Blackwell, vol. 33(3), pages 796-814, August.
    • Handle: RePEc:bla:reviec:v:33:y:2025:i:3:p:796-814
    DOI: 10.1111/roie.12807
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/roie.12807
    Download Restriction: no
    File URL: https://libkey.io/10.1111/roie.12807?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reviec:v:33:y:2025:i:3:p:796-814. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.