The Impact of Digital Trade Rule Depth on Export Sophistication

With the increasingly prominent role of digital trade in international commerce, digital trade rules have become a focal point for nations worldwide. Currently, multilateral negotiations on digital trade rules are progressing slowly, prompting countries to shift toward bilateral and regional trade agreement negotiations. This study employs bilateral export data and per capita GDP figures from 1,408 country pairs (2002–2020) to measure export sophistication using the Hausmann method. Combining this with digital trade rule depth metrics from the TAPED database, we construct a regression model to empirically analyze the impact of digital trade rules on bilateral export sophistication. Key findings include: (1) digital trade rules have significant positive impacts on bilateral export sophistication, (2)the effects vary across different rule provisions, (3) South-South agreements significantly boost export sophistication among developing nations, North-South agreements benefit both developed and developing countries, and North-South agreements exert stronger upgrading effects on developing countries than South-South agreements, (4) trade costs serve as a significant channel through which digital trade rules affect export sophistication. Policy recommendations are provided as follow. Firstly, countries should prioritize active engagement in regional trade agreement negotiations to strengthen their influence in digital trade rule-setting. Secondly, domestic regulatory frameworks must be enhanced through robust legal infrastructure development, ensuring synergistic alignment between international commitments and national policies. Thirdly, all nations should deepen cross-border cooperation in the digital trade domain, with developing countries particularly advised to proactively pursue partnerships with developed economies—this strategic collaboration will accelerate technological upgrading and foster inclusive development across global value chains.