This month's featured article
Globalisation and servitisation of firms drive entry into cross-border data transfers
ITO BanriResearch Associate, RIETI
TOMIURA EiichiFaculty Fellow, RIETI
With the expansion of digital trade, firms are actively collecting and utilising data. This column uses a survey of Japanese firms in 2019 and 2021 to examine the dynamics of corporate activities related to cross-border data flows. The authors find a significant increase in cross-border data collection activities, led by high-productivity firms. In addition to productivity and firm size, globalisation and servitisation are especially useful for explaining firms’ entry into overseas data collection activities.
According to the OECD, all trade that includes digital ordering processes or delivery is ‘digital trade’ (OECD 2020). Although there are difficulties in measuring digital trade, López-González et al. (2023) estimate that it accounted for 24% of international trade in 2018, a significant increase from 19% in 1995. While digital trade in physical goods is ordered digitally and delivered physically, digital services can be ordered digitally and delivered digitally, and such trade increased markedly during the pandemic. Since digital trade involves the transfer of data between buyers and sellers for ordering and/or delivery, ensuring free cross-border data transfers is an important factor in promoting digital trade.
Despite the importance of free data transfers, barriers to digital trade are high and there are marked differences among countries. Some recent empirical evidence has already shown that regulatory measures restricting such cross-border data flows hurt digital trade. For example, Gupta et al. (2022) report a negative impact of restrictions on digital trade using cross-country data from 60 countries during the period from 2006 to 2017. López-González et al. (2023) show that digital connectivity and digital trade policies play a significant role in reducing trade costs and increasing trade across countries. While these previous studies show country-level impacts, a firm-level analysis is required regarding how many firms are affected. Our survey of Japanese firms in 2019 shows only a limited fraction of the total population of firms, but many of the firms engaged in cross-border transfers of data, are affected by such regulations (Tomiura et al. 2019). However, the identification of the firm attributes that are determinants of cross-border data transfers has remained limited due to data availability issues.
To read the full text:
https://www.rieti.go.jp/en/columns/v01_0206.html
Related article
“Regulating cross-border data flows: Firm-level analysis from Japan”
TOMIURA Eiichi (Faculty Fellow, RIETI) / ITO Banri (Research Associate, RIETI) / KANG Byeongwoo (Hitotsubashi University)
https://www.rieti.go.jp/en/columns/v01_0147.html
Related papers
“Firm-level Determinants of Cross-border Data Flows: An econometric analysis based on a variable selection technique”
ITO Banri (Research Associate, RIETI) / TOMIURA Eiichi (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/publications/summary/23070017.html
“Characteristics of Firms Transmitting Data Across Borders: Evidence from Japanese Firm-level Data”
TOMIURA Eiichi (Faculty Fellow, RIETI) / ITO Banri (Research Associate, RIETI) / KANG Byeongwoo (Hitotsubashi University)
https://www.rieti.go.jp/en/publications/summary/20050009.html
“Effects of Regulations on Cross-border Data Flows: Evidence from a Survey of Japanese Firms”
TOMIURA Eiichi (Faculty Fellow, RIETI) / ITO Banri (Research Associate, RIETI) / KANG Byeongwoo (Hitotsubashi University)
https://www.rieti.go.jp/en/publications/summary/19100029.html
Our latest discussion papers
“Credit Allocation and Public Credit Guarantee Schemes for Small Businesses: Evidence from Japan”
TSURUTA Daisuke (Nihon University)
https://www.rieti.go.jp/en/publications/summary/23120001.html
“Automation and the Disappearance of Routine Work in Japan”
KIKUCHI Shinnosuke (MIT) / FUJIWARA Ippei (Faculty Fellow, RIETI) / SHIROTA Toyoichiro (Aoyama Gakuin University)
https://www.rieti.go.jp/en/publications/summary/23110024.html
“SMART-EXAM: Incorporating Participants' Welfare into Sequential Multiple Assignment Randomized Trials”
Xinru WANG (Duke-NUS Medical School) / Nina DELIU (University of Cambridge / Sapienza University of Rome) / NARITA Yusuke (Visiting Fellow, RIETI) / Bibhas CHAKRABORTY (Duke-NUS Medical School / National University of Singapore / Duke University)
https://www.rieti.go.jp/en/publications/summary/23110022.html
[List of discussion papers]
https://www.rieti.go.jp/en/publications/act_dp.html
[List of upcoming and past symposiums]
https://www.rieti.go.jp/en/events/symposium.html
[List of upcoming and past BBL seminars]
https://www.rieti.go.jp/en/events/bbl/
* To subscribe, please go to SHANON's website.
Subscribe
Event Information
Fellow titles and links in the text are as of the date of publication.
For questions or comments regarding RIETI Report, please contact the editor.
*If the "Send by mailer" button does not work, please copy the address into your email "send to" field and connect the prefix and the suffix of the address with an "@", sending it normally.RIETI Report is published bi-weekly.