Privacy at a price? : an empirical analysis of GDPR's impact on EU trade flows

The introduction of the EU's General Data Protection Regulation (GDPR) in 2018 created conditions that could raise the cost of trading services with the EU, especially where cross-border transfers of personal data are required. This paper examines whether the GDPR has truly affected trade in digital services between EU member states and third countries. Using a triple-difference strategy that compares EU trade with partners whose cross-border transfer regimes differ from the EU's conditional model to a suitable control group, this paper accounts for the fact that, over time, many partners have adopted a similar conditional model (so-called spillovers), following the phenomenon known as the "Brussels effect." Identification relies on two elements: sectoral data intensity, measured by the share of firms in each sector participating in the EU-US Data Privacy Framework (DPF), and partner regime alignment, distinguishing EU-style conditional regimes from non-aligned regimes. We estimate a structural-gravity PPML model with high-dimensional fixed effects, complemented by robustness checks using input-output-based intensity measures and a non-gravity triple difference on growth.