Do Data Policy Restrictions Impact the Productivity Performance of Firms and Industries?

59 Pages Posted: 8 May 2019

See all articles by Martina Ferracane

Martina Ferracane

University of Hamburg - Institute of Law and Economics; European Centre for International Political Economy (ECIPE); University of California, Davis

Janez Kren

KU Leuven

Erik van der Marel

European Centre for International Political Economy (ECIPE); European Center for International Political Economy

Date Written: April 2019

Abstract

This paper examines how policies regulating the cross-border movement and domestic use of electronic data on the internet impact the productivity of firms in sectors relying on electronic data. In doing so, we collect regulatory information on a group of developed economies and create an index that measures the regulatory restrictiveness of each country’s data policies. The index is based on observable policy measures that explicitly inhibit the cross-border movement and domestic use of data. Using cross-country firm-level and industry-level data, we analyse econometrically the extent to which these data regulations over time impact the productivity performance of downstream firms and industries respectively. We show that stricter data policies have a negative and significant impact on the performance of downstream firms in sectors reliant on electronic data. This adverse effect is stronger for countries with strong technology networks, for servicified firms, and holds for several robustness checks.

Keywords: Cross-border data flow, regulatory policies, firm-level productivity, Total Factor Productivity (TFP)

Suggested Citation

Ferracane, Martina and Kren, Janez and Marel, Erik van der, Do Data Policy Restrictions Impact the Productivity Performance of Firms and Industries? (April 2019). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2019/28, Available at SSRN: https://ssrn.com/abstract=3384004 or http://dx.doi.org/10.2139/ssrn.3384004

Martina Ferracane (Contact Author)

University of Hamburg - Institute of Law and Economics ( email )

Johnsallee 35
Hamburg, 20148
Germany

European Centre for International Political Economy (ECIPE) ( email )

Rue Belliard 4-6
Brussels, 1040
Belgium

University of California, Davis ( email )

Martin Luther King Jr. Hall
Davis, CA 95616
United States

Janez Kren

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Erik van der Marel

European Centre for International Political Economy (ECIPE) ( email )

Rue Belliard 4-6
Brussels, 1040
Belgium

European Center for International Political Economy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
49
Abstract Views
270
PlumX Metrics