Discussion on Coordination Mechanism of Digital Trade Barriers Formed by Data Governance Differences from the Perspective of Gravity Model

Abstract

A gravity model can be used to examine how digital trade barriers form at the level of theory. This paper applies the above framework to explore how different data governance models in various countries lead to trade restriction effects via institutional distance. The three governance models in the United States, the European Union and China are a market-oriented system, a rights-based system and a security-oriented system, respectively, and differ in terms of values and regulatory paths. The institution has added new forms of trade barriers, such as higher cross-border compliance costs and greater regulatory uncertainty. The OECD Digital Services Trade Restrictiveness Index (Digital STRI) covers 91 economies as of 2024, spanning the period 2014–2024. The data show that global digital services trade barriers rose by 25% cumulatively between 2014 and 2023. By early 2023, 40 countries had introduced around 100 data localisation measures, and China ranked 71st out of 85 economies. Breakdown of these barriers requires the establishment of a hierarchical and progressive coordination mechanism at the three levels of bilateral mutual recognition, regional cooperation and multilateral systems, and the data governance rules can gradually shift from a fragmented state to one of compatibility and mutual recognition, thereby reducing the inhibiting effect of institutional distance on digital trade.