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A methodology to estimate the costs of data regulations

Author

Listed:
  • Erik van der Marel
  • Matthias Bauer
  • Hosuk Lee-Makiyama
  • Bert Verschelde

Abstract

This paper provides a robust and significant explanation of how the costs of data regulation affect downstream industries in an economy. In doing so we first select observable regulatory barriers that explicitly inhibit the domestic and cross-border movement of data, which are currently being implemented by various governments. Second, we calculate the costs of these data regulations for domestic industries through establishing an empirical link between regulation in data and domestic downstream performance at industry level across a set of countries. As such, this paper is the first work that attempts to analyse this connection econometrically by setting up a proxy index of data regulation using a typology of existing indices of administrative barriers. We show that the type of regulations prevalent in data indeed tends to affect downstream industry performance of industries that depend more heavily on data services for the countries under consideration in our study. Finally, the negative performance outcomes as a result of data regulation in these countries are employed in a general equilibrium analysis using the Global Trade Analysis Project (GTAP) in order to estimate the impact on country-specific GDP, industry production, and foreign trade.

Suggested Citation

  • Erik van der Marel & Matthias Bauer & Hosuk Lee-Makiyama & Bert Verschelde, 2016. "A methodology to estimate the costs of data regulations," International Economics, CEPII research center, issue 146, pages 12-39.
  • Handle: RePEc:cii:cepiie:2016-q2-146-2
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    File URL: http://www.sciencedirect.com/science/article/pii/S2110701715000670
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    Cited by:

    1. Martina Francesca Ferracane & Janez Kren & Erik van der Marel, 2020. "Do data policy restrictions impact the productivity performance of firms and industries?," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 676-722, August.
    2. Jinke Li & Fang Wang, 2024. "A Study on the Competitiveness and Influencing Factors of the Digital Service Trade," Sustainability, MDPI, vol. 16(8), pages 1-21, April.
    3. Ferracane,Martina Francesca & Van Der Marel,Erik Leendert, 2020. "Digital Innovation in East Asia : Do Restrictive Data Policies Matter," Policy Research Working Paper Series 9124, The World Bank.
    4. Shuang Hao & Zhi Chen & Chien-Chih Wang & Che-Yu Hung, 2023. "Impact of Digital Service Trade Barriers and Cross-Border Digital Service Inputs on Economic Growth," Sustainability, MDPI, vol. 15(19), pages 1-20, October.
    5. Xiying Zhang & Yihuan Wang, 2022. "Research on the Influence of Digital Technology and Policy Restrictions on the Development of Digital Service Trade," Sustainability, MDPI, vol. 14(16), pages 1-16, August.
    6. Lingduo Jiang & Shuangshuang Liu & Guofeng Zhang, 2022. "Digital trade barriers and export performance: Evidence from China," Southern Economic Journal, John Wiley & Sons, vol. 88(4), pages 1401-1430, April.
    7. Erik Marel & Martina Francesca Ferracane, 2021. "Do data policy restrictions inhibit trade in services?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 157(4), pages 727-776, November.

    More about this item

    Keywords

    Regulation; Data Flows; Total Factor Productivity; GTAP;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L8 - Industrial Organization - - Industry Studies: Services

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