Standards-based hierarchical governance of a digital trade network

Abstract

Standards are the cornerstone of digital trade; however, the ideal method of governance of digital trade networks using technical standards remains underexplored. This study establishes a theoretical framework by investigating the effect of technical standards on a digital trade network and exploring the policy implications of technical-standards-based hierarchical governance. The findings reveal the heterogeneous patterns of digital trade networks and their governance characteristics. Furthermore, international, regional, and national technical standards are integral to the hierarchical governance of digital trade networks. Digital trade flow diffuses through a digital trade network, wherein technical standards have different levels of compatibility and security, and digital-trading countries make trade-offs. The results highlight that digital-trading countries need to explicitly incorporate the compatibility and security of technical standards into trade agreements, promote the harmonization of digital standards, and advance international cooperation to guarantee the flow of digital trade and reap its benefits.