Unlocking digital trade in Southeast Asia: The roles of infrastructure and regulation

Digital trade is reshaping global commerce, yet the way infrastructure and regulation interact to drive outcomes in Southeast Asia remains poorly understood. We address that gap by combining a new composite index of digital infrastructure with international measures of regulatory openness: the OECD Services Trade Restrictiveness Index, the UN E-Government Development Index, and the E-Participation Index. Using panel data for nine ASEAN economies from 2010 to 2022 and fixed-effects regression models, we examine five outcomes: ICT goods exports and imports, digitally deliverable services exports and imports, and trade openness. The results challenge conventional assumptions. Infrastructure on its own does not reliably predict performance when rules and macroeconomic fundamentals are considered. Instead, institutions, particularly regulatory restrictiveness and participatory governance, emerge as decisive. This finding advances institutional theory in the digital trade domain and offers evidence that predictable, open, and inclusive rules are more powerful than infrastructure alone in shaping regional competitiveness.