The impact of government digital attention on trade in services

Abstract

With China elevating the “Digital China” initiative to a national strategy, we examine how government digital attention enhances international service trade competitiveness by reducing trade costs and increasing service tradability. Using digital‐related keyword frequency in government reports from prefecture‐level cities (2010–2022), we construct a government digital attention index and integrate it with service trade data from the China Business Yearbook. Employing a two‐way fixed effects model, we find that a 1% increase in government digital attention leads to a 3.06% rise in total service trade and a 2.12% increase in service trade exports. The findings remain robust after controlling for extreme values, adopting alternative variable measurement methods, and accounting for regional economic fluctuations. Moreover, we identify the development of digital infrastructure, the enhancement of human capital and education, and improvements in government governance efficiency as the primary mechanisms driving this effect. In regions with high market potential, greater openness, southeastern areas, non‐resource‐based economies, and higher development levels, the trade‐promoting effect of government digital attention is more pronounced, mainly driven by digital infrastructure density and governance efficiency. Our study advances digital governance and high‐quality service trade development, offering policy insights for differentiated digital strategies and refining the digital economy‐service trade framework.