Do Digital Trade Rules Matter? Empirical Evidence from TAPED

Round 1

Reviewer 1 Report

Digital trade has brought about significant changes to the globalization development. This study utilizes panel data from the TAPED database encompassing economies between 2005 and 2019 to examine the impact of bilateral digital trade rules on digital services exports, employing a difference-difference model as the analytical framework. This manuscript mainly constructs a DID model, and detects possible problems in each process of model construction, and the conclusion further explains the import and export effects of bilateral digital trade rules. It is recommended to solve some problems.

1.     In the abstract, the data source and research method model are introduced, in which the third point of the conclusion is not strong with the logic of the previous two points, firstly, bilateral trade rules have a significant role in promoting the export of digital services, second, the impact of bilateral trade rules on different types of trade and national income levels is significantly different, and third, trade costs have an intermediary role and promote the benefits of digital service exports.

2.     In the keywords, "Trade in digital services" is replaced by "digital services export", and "Trade cost" is changed to "Trade costs".

3.     In line 29 change “digital services trade” to “digital services trade in exports”, so it is clearer in this paragraph.

4.     The theme of the article focuses on the significant impact and impact differences of bilateral digital trade rules on digital trade exports, but the concept and development of bilateral digital trade rules are missing in the literature, and the article also uses digital trade rules to express bilateral digital trade rules Consider defining and clarifying the differences or harmonizing them in the article.

5.     In line 412, consider removing the end “of “the table name from it.

6.     It is suggested that the relevant websites should be marked where the manuscript data comes from.

7.     The citation format and author format of the manuscript do not meet the publishing requirements of the Journal of Sustainability, so it is suggested that the author carefully revise them.

8.     The spelling of this manuscript requires proofreading and I recommend English language editing by a native speaker. For example, in line 20-22,” overall, our research underscores the critical role of bilateral digital trade rules and provides a valuable reference for policymakers in China seeking to enhance institutional openness in the digital trade domain.” In line 153-155.” In summary, domestic and foreign scholars have achieved rich research results in the types of FTA trade rules, types of digital trade rules, and the trade effects of digital trade rules.” What the meaning of “domestic and foreign scholars”? the Journal of Sustainability is a International Journal, rather than a Chinese Journal.

Digital trade has brought about significant changes to the globalization development. This study utilizes panel data from the TAPED database encompassing economies between 2005 and 2019 to examine the impact of bilateral digital trade rules on digital services exports, employing a difference-difference model as the analytical framework. This manuscript mainly constructs a DID model, and detects possible problems in each process of model construction, and the conclusion further explains the import and export effects of bilateral digital trade rules. It is recommended to solve some problems.

1.     In the abstract, the data source and research method model are introduced, in which the third point of the conclusion is not strong with the logic of the previous two points, firstly, bilateral trade rules have a significant role in promoting the export of digital services, second, the impact of bilateral trade rules on different types of trade and national income levels is significantly different, and third, trade costs have an intermediary role and promote the benefits of digital service exports.

2.     In the keywords, "Trade in digital services" is replaced by "digital services export", and "Trade cost" is changed to "Trade costs".

3.     In line 29 change “digital services trade” to “digital services trade in exports”, so it is clearer in this paragraph.

4.     The theme of the article focuses on the significant impact and impact differences of bilateral digital trade rules on digital trade exports, but the concept and development of bilateral digital trade rules are missing in the literature, and the article also uses digital trade rules to express bilateral digital trade rules Consider defining and clarifying the differences or harmonizing them in the article.

5.     In line 412, consider removing the end “of “the table name from it.

6.     It is suggested that the relevant websites should be marked where the manuscript data comes from.

7.     The citation format and author format of the manuscript do not meet the publishing requirements of the Journal of Sustainability, so it is suggested that the author carefully revise them.

8.     The spelling of this manuscript requires proofreading and I recommend English language editing by a native speaker. For example, in line 20-22,” overall, our research underscores the critical role of bilateral digital trade rules and provides a valuable reference for policymakers in China seeking to enhance institutional openness in the digital trade domain.” In line 153-155.” In summary, domestic and foreign scholars have achieved rich research results in the types of FTA trade rules, types of digital trade rules, and the trade effects of digital trade rules.” What the meaning of “domestic and foreign scholars”? the Journal of Sustainability is a International Journal, rather than a Chinese Journal.

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Reviewer 2 Report

The paper is a rigorous well-designed study on the impact of bilateral agreements on mutual trade in digital services with the help of treatment effects (DiD). The paper, however, has one major defect: there are no explicit comments on the three hypotheses set in the theoretical section (although the findings are properly presented) and no discussion, i.e., a section that would compare the authors' findings with the previous research. Furthermore, including recommendations for Chinese policymakers into conclusion only seems questionable as well. Correction of theses issues is crucial for the paper's publication, but, as I pointed out, most of this information is already present in the text and is simply not adequately presented.

I've detected a few minor methodological issues as well:

1. The classification frequently referred to in the paper as USBEA/OECD is, in reality, EBOPS 2010 of the IMF. The data used in the paper come from individual countries' balance of payments (there is no other statistical source of information on service trade – even if the immediate source is the WTO), and the IMF is the institution "responsible" for BOP statistics since 1949 (the first BPM manual published, and now we have BPM6). I'm enclosing the corresponding IMF material into my review to prove this point.

2. With regards to the above-stated, it is necessary to stress that the selected six other services categories (see EBOPS 2010) represent a proxy variable of digital trade since, clearly, personal, educational, and recreational services as well as royalties and license fees, may include all kinds of economic activity and not only digital ones.

3. The royalties and license fees include, among other, software licenses (like the ones for Microsoft 365, Wondershare products, or even music and video streaming) but their share in overall license deals may still be relatively small (such big projects as automotive licenses or medical drug licenses may be more important in value), which leads to the results presented in the homogeneity section. In any case, the country with the biggest values in exports of  royalties and license fees globally are still the U.S. (since they hold the biggest amount of patents and actively offer part of the corresponding technology to third countries under licenses).

4. The choice of four service categories in the 3rd hypothesis is never explained. Why were they selected out of the six total? (lines 226–229). This problem needs to be rectified.

5. The section on heteroegeneity states that there are significant differences between individual categories. Personally, I think that such a statement should stem from a panel-effects or a similar test. Also, it is necessary to explain what is meant by alpha = 1 in the Placebo test section.

6. The control variable "colonizer" from CEPII's GeoDist or Gravity datasets is not fully explained: CEPII works with at least major and minor colonizers, please explain which one was used (or both).

 

 

 

Comments for author File: Comments.pdf

I haven't detected any problems with the English language.

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Reviewer 3 Report

1.     The research has interesting and valid findings, and is well written and succinctly presented.

 

 

2.     The authors should explain why they apply the specific econometric method and not panel system GMM. There should be a short paragraph in the introduction to the article explaining this.

 

3.     The authors should be better motivated. In addition, the literature review is limited. I recommend the authors extend the literature review. The authors should enrich the literature review with relevant papers such as Konstantakopoulou (2016).

 

4.     The authors should mention and explain the policy implications of their work.

Reference

Konstantakopoulou, I., (2016). New evidence on the Export-led-growth hypothesis in the Southern Euro-zone countries (1960-2014). Economics Bulletin, 36 (1), 429-439.

Moderate editing of English language.

Author Response

Please see the attachment.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

I think the question we asked has been revised, and the revised manuscript has reached the publishing standard of sustainable journals. It is recommended to modify the format and a small amount of content before publishing.

Author Response

Thank you a lot. We have carefully revised the manuscript format in strict according to the requirements of the journal, reviewed the entire text, revised the relevant content, and checked the correlation between the references and the manuscript.

Reviewer 3 Report

The paper in this version is improved.

 Extensive editing of English language required.

Author Response

Thank you for your suggestion. We have revised the content of the manuscript and English grammar. We have enriched the literature review with relevant papers as Konstantakopoulou (2016). Based on your suggestion, we have made extensive revisions to the English language.