Regulating Personal Data: Data Models and Digital Services Trade

While regulations on personal data
\n diverge widely between countries, it is nonetheless possible
\n to identify three main models based on their distinctive
\n features: one model based on open transfers and processing
\n of data, a second model based on conditional transfers and
\n processing, and third a model based on limited transfers and
\n processing. These three data models have become a reference
\n for many other countries when defining their rules on the
\n cross-border transfer and domestic processing of personal
\n data. The study reviews their main characteristics and
\n systematically identifies for 116 countries worldwide to
\n which model they adhere for the two components of data
\n regulation (i.e. cross-border transfers and domestic
\n processing of data). In a second step, using gravity
\n analysis, the study estimates whether countries sharing the
\n same data model exhibit higher or lower digital services
\n trade compared to countries with different regulatory data
\n models. The results show that sharing the open data model
\n for cross-border data transfers is positively associated
\n with trade in digital services, while sharing the
\n conditional model for domestic data processing is also
\n positively correlated with trade in digital services.
\n Country-pairs sharing the limited model, instead, exhibit a
\n double whammy: they show negative trade correlations
\n throughout the two components of data regulation. Robustness
\n checks control for restrictions in digital services, the
\n quality of digital infrastructure, as well as for the use of
\n alternative data sources.