Digital Services Trade Barriers and the Resilience of Global Value Chains

ABSTRACT How to enhance the resilience of global value chains (GVC) to withstand potential risks and adapt to complex changes is a global issue that needs to be addressed. This paper identifies and examines the effects and mechanisms of digital services trade barriers on the resilience of GVC in 55 countries and 44 industries based on panel data from 2000 to 2018. We find that digital trade barriers to services have a significant inhibitory effect on the enhancement of GVC resilience, which is mainly achieved through three mechanisms: increasing trade costs, weakening industrial linkages, and hindering technological innovation. The negative effects of digital trade barriers vary significantly across different digital trade barrier policy areas, different sources of digital factor inputs, different embedded positions in GVC, and different digital factor‐intensive industries. Improving digital infrastructure and enhancing international coordination of digital trade policies are effective measures for global economies to mitigate the negative effects of barriers to trade in digital services.