Welfare Effects of the EU GDPR and Data Localization Measures

Abstract

In this study, we set up a quantitative trade model with data protection regulation in order to examine the welfare impact of the EU GDPR and data localiztaion measures on the global economy in a unified framework. Data localization measures can create additional trade costs, which can serve as trade barriers for firms in trading partners that rely on cross-border data flows. Aslo, the EU’s achievements realized by the GDPR may come mainly at the cost of trading partners consisting of non-EU countries.