The Impact Of Cultural Differences On Trade In Digital Services

The rapid development of ICT and mobile internet technology has promoted the formation of industrial digitalization and digital industrialization,and the social economy has developed from the traditional industrial economy era to the current digital economy era.As an important part of the digital industry,the development of digital service trade has greatly promoted the growth of the global economy.Especially during the new crown epidemic,the proportion of digital service trade in service trade increased from 48% to 63.6%,showing a trend of contrarian growth.As the most important participant in global trade,China’s trade in goods and trade in services has leapt to the first and second place in the world respectively,and is moving towards becoming a trading power.China’s advocacy of the development of digital service trade and the improvement of the level of trade digitalization are of great significance for effectively promoting high-quality development.Network information technology has fundamentally changed the traditional service industry model.Compared with hidden costs,explicit costs have a weakened impact on trade in services,such as tariffs and transportation costs.Cultural differences mainly hinder the development of service trade by increasing hidden costs,such as trade uncertainty and information asymmetry.However,the impact of cultural differences on trade in digital services has not been adequately studied in the existing literature.Therefore,choosing digital service trade as a research object and discussing the impact of cultural differences on it has important practical and theoretical significance for the development of digital service trade in China.Taking the bilateral digital service trade data of 42 countries from 2007 to 2020 as a sample,this thesis uses the multidimensional fixed Poisson pseudo-maximum likelihood estimation method(PPML)to empirically analyze the impact of cultural differences on digital service trade under the regulation of regional digital trade rules.This thesis first expounds the concepts and measurement of digital service trade,cultural differences and regional digital trade rules.This thesis divides trade in digital services into six categories: intellectual property services,insurance services,ICT services,financial services,personal services,and other business services.Cultural differences use a combination of language,ethnicity,and religion as proxy variables.Based on the TAPED database,this thesis quantifies the provisions on digital trade rules in regional trade agreements and constructs the depth index of regional digital trade rules.Next,this thesis introduces the relevant basic theories and sorts out the influence mechanism of cultural differences on digital service trade,as well as the regulation mechanism of regional digital trade rules on the relationship between cultural differences and digital service trade.This thesis argues that cultural differences mainly affect trade in digital services through communication barriers,information barriers,bilateral trust,and consumers’ purchasing preferences.At the same time,regional digital trade agreements have a regulating effect on the relationship between cultural differences and digital service trade,and regional digital trade rules reduce the transaction costs and trust risks caused by cultural differences from the institutional level,thereby weakening the negative impact of cultural differences on digital service trade.Thirdly,based on UNCTAD digital service trade data,this thesis statistically analyzes the current situation and existing problems of digital service trade development.Through analysis,it is found that the scale of digital service trade continues to expand,and its proportion in service trade is increasing year by year.From the perspective of trade structure,other business services dominate,and ICT services and intellectual property services will become the key driving force for the development of the digital service trade.Developed countries are in a dominant position in digital service trade,but the growth rate of digital service trade in developing countries is ahead of developed countries.Finally,this thesis selects the digital service trade data of 42 countries from 2007 to2020,constructs an extended gravitational model,uses the multidimensional fixed Poisson pseudo-maximum likelihood estimation method(PPML)to empirically analyze the impact of cultural differences on digital service trade,and discusses the role of regional digital trade rules in it.The results show that cultural differences have a significant negative impact on digital service trade,and when the cultural differences between the two countries are greater,the smaller the bilateral digital service trade.In different digital service industries,cultural differences hinder the personal service industry even more significantly.Moreover,cultural differences have a greater impact on digital services trade in developing countries than in developed countries.In addition,regional digital trade rules play an important regulating role in the relationship between cultural differences and digital service trade.Specifically,the deeper the regional digital trade rules signed by the trading parties,the lower the negative impact of cultural differences on digital service trade.On this basis,in order to promote the development of China’s digital service trade,this thesis puts forward policy recommendations from both the government and business.