Assessing the impact of digital trade policies on economic growth: A propensity score matching and difference-in-differences analysis in Southeast Asia


Authors

  • Phan Khanh Duy Binh Duong University
DOI: https://doi.org/10.57110/vnu-jeb.v5i6.361

Keywords:

Digital trade, economic growth, policy impact, Southeast Asia

Abstract

The rapid expansion of digital trade has restructured global commerce in Southeast Asia, where accelerated technological adoption intersects with high growth potential. Digital trade policies-covering e-commerce facilitation, digital payments, and cross-border data governance—constitute core institutional drivers of growth and regional integration. This study estimates their causal effect on economic growth using Propensity Score Matching combined with Difference-in-Differences (DiD) to address policy endogeneity. Panel data for ASEAN economies from 2015 to 2023 integrate macroeconomic indicators with policy adoption measures. Policy adoption increases annual GDP growth by 2.5 per cent, with heterogeneous effects across income groups and policy dimensions. Strongest effects occur in high-income economies and in regimes prioritizing data governance and e-commerce facilitation.

References

Andrillon, A., Pirracchio, R., & Chevret, S. (2020). Performance of propensity score matching to estimate causal effects in small samples. Statistical Methods in Medical Research, 29(3), 644–658. https://doi.org/10.1177/0962280219887196

Banerjee, S., Bose, P., & Siddiqui, I. N. (2022). Digital dynamics and international trade: Experiences of South and South-East Asia. International Journal of Asian Business and Information Management (IJABIM), 13(1), 1–16. https://doi.org/10.4018/IJABIM.297849

Choi, S. M., Kim, H., & Ma, X. (2021). Trade policies and growth in emerging economies: Policy experiments. Review of World Economics, 157(3), 603–629. https://doi.org/10.1007/s10290-021-00413-6

Elfaki, K. E., & Ahmed, E. M. (2024). Digital technology adoption and globalization innovation implications on Asian Pacific green sustainable economic growth. Journal of Open Innovation: Technology, Market, and Complexity, 10(1), 100221. https://doi.org/10.1016/j.joitmc.2024.100221

Farhad, M. A. (2024). Consumer data protection laws and their impact on business models in the tech industry. Telecommunications Policy, 48(9), 102836. https://doi.org/10.1016/10.1016/j.telpol.2024.102836

Grossman, G. M., & Helpman, E. (1991). Trade, knowledge spillovers, and growth. European Economic Review, 35(2–3), 517–526. https://doi.org/10.1016/0014-2921(91)90153-A

Gupta, S., Ghosh, P., & Sridhar, V. (2022). Impact of data trade restrictions on IT services export: A cross-country analysis. Telecommunications Policy, 46(9), 102403. https://doi.org/10.1016/j.telpol.2022.102403

Ham, D. W., & Miratrix, L. (2024). Benefits and costs of matching prior to a difference in differences analysis when parallel trends does not hold. The Annals of Applied Statistics, 18(3), 2096–2122. https://doi.org/10.48550/arXiv.2205.08644

He, D. (2021). Digitalization of cross-border payments. China Economic Journal, 14(1), 26–38. https://doi.org/10.1080/17538963.2020.1870272

Heng, S., & Small, D. S. (2021). Sharpening the Rosenbaum sensitivity bounds to address concerns about interactions between observed and unobserved covariates. Statistica Sinica, 31, 2331–2353. https://www.jstor.org/stable/27089278

Jiang, T., Hu, Y., Haleem, F., & Zeng, S. (2023). Do digital trade rules matter? Empirical evidence from TAPED. Sustainability, 15(11), 9074. https://doi.org/10.3390/su15119074

Law, C. C., Zhang, Y., Gow, J., & Vu, X.-B. (2022). Dynamic relationship between air transport, economic growth and inbound tourism in Cambodia, Laos, Myanmar and Vietnam. Journal of Air Transport Management, 98, 102161. https://doi.org/10.1016/j.jairtraman.2021.102161

Liu, Y., & Qin, J. (2024). Tuning-parameter-free propensity score matching approach for causal inference under shape restriction. Journal of Econometrics, 244(1), 105829. https://doi.org/10.1016/j.jeconom.2024.105829

Narayan, S. (2025). E-Commerce and International Trade: The Case for Indonesia and Malaysia. Emerging Markets Finance and Trade, 61(9), 2616–2642. https://doi.org/10.1080/1540496X.2025.2461244

Romer, P. M. (1990). Endogenous Technological Change. Journal of Political Economy, 98(5, Part 2), S71–S102. https://doi.org/10.1086/261725

Shafrullah, F., Indrawati, L., Ismail, S., Ihsan, F., Pratiwi, P. A., & Karno, K. (2024). Determinant factors of gross domestic product (GDP) in Association of Southeast Asian Nations (ASEAN) member countries. F1000Research, 13, 384. https://doi.org/10.12688/f1000research.146826.2

Shiba, K., & Kawahara, T. (2021). Using propensity scores for causal inference: Pitfalls and tips. Journal of Epidemiology, 31(8), 457–463. https://doi.org/10.2188/jea.je20210145

Sundram, P. (2023). ASEAN as network governance: An alternative lens to evaluate policymaking and performance. F1000Research, 12, 1073. https://doi.org/10.12688/f1000research.136338.2

Wan, F. (2025). Propensity Score Matching: Should we use it in designing observational studies? BMC Medical Research Methodology, 25(1), 25. https://doi.org/10.1186/s12874-025-02481-w

Windzio, M. (2021). Causal inference in collaboration networks using propensity score methods. Quality & Quantity, 55(1), 295–313. https://doi.org/10.1007/s11135-020-01005-6

Wong, K. N., Tan, B. W., & Goh, S. K. (2023). A nexus between intra-ASEAN outward FDI, intra-ASEAN exports and economic growth of ASEAN-10: Evidence using panel causality analysis. Asia-Pacific Journal of Business Administration, 15(4), 489–508. https://doi.org/10.1108/APJBA-05-2021-0218?urlappend=%3Futm_source%3Dresearchgate.net%26utm_medium%3Darticle

Wu, D., & Li, X. (2025). Sensitivity Analysis for Quantiles of Hidden Biases in Matched Observational Studies. Journal of the American Statistical Association, 120(551), 1657–1668. https://doi.org/10.1080/01621459.2024.2441527

Ye, J., Zhang, N., Deng, X., & Niu, Y. (2024). How Does the One Belt One Road Initiative Affect the Chinese International Architecture, Engineering, and Construction Firms? Empirical Analysis Based on Propensity Score Matching and Difference-in-Differences Method. Buildings, 14(7), 2016. https://doi.org/10.3390/buildings14072016

Zhang, L., Zhang, Y., & Zhao, C. (2023). The impact of cross-border e-commerce policy on imports: Evidence from China. Journal of Global Information Management (JGIM), 31(6), 1–15. https://doi.org/10.4018/JGIM.321178

Zhou, F., Li, L., & Wen, H. (2024). Regional digital infrastructure and carbon neutrality: A technology–structure–efficiency perspective. Energy Strategy Reviews, 56, 101583. https://doi.org/10.1016/j.esr.2024.101583

Downloads

Download data is not yet available.

Published

25-12-2025

Abstract View

8

PDF Downloaded

How to Cite

Phan Khanh Duy. (2025). Assessing the impact of digital trade policies on economic growth: A propensity score matching and difference-in-differences analysis in Southeast Asia. VNU University of Economics and Business, 5(6). https://doi.org/10.57110/vnu-jeb.v5i6.361

Issue

Section

Original Articles