DIGITAL TRADE'S TRANSFORMATION OF THE GLOBAL INDUSTRIAL CHAIN: A CONCEPTUAL FRAMEWORK

Abstract

Digital trade and digitisation technologies are transforming the global industrial chain, reducing traditional trade costs, enabling worldwide production and trade of service products, and posing theoretical questions about its impact. From a transaction cost perspective, digital trade lowers spatial-physical costs, reduces information gaps, and streamlines management costs, fostering a global production division for digital products. Regarding comparative advantage, data and digital tech reshape country and company strengths, altering global industrial chain interests. Platform economies, formed through digital trade, amplify scale and network effects, offering value but potentially causing market polarisation. Lastly, digital trade reshapes global industrial chain organisation and necessitates new rules, departing from traditional international trade norms.