How does digital payment affect international trade? Research based on the social network analysis method

Abstract

Digital payment is one of the latest trendsin modern payment systems; its development has a profound impact on international trade relations and the international trade status of countries. We constructed an international trade network by using global commodity trade data to measure countries' international trade status. Based on this, we used panel data from 25 countries for the period between 2012 and 2020 and employed a fixed-effect model to test the relationship between digital payment and international trade status. Empirical results show that, first, the development of digital payment can effectively enhance a country's international trade status. Second, digital payment strengthens international trade connections by lowering barriers to cross-border capital flows, thereby improving a country's international trade status. Third, the effect of digital payment on enhancing international trade status varies across countries with different degrees of trade openness. The findings of this study provide theoretical support for the development of digital payment and international trade.

Keywords

• international trade status
• digital payment
• social network analysis method
• international trade network