Abstract
Between 2000 and 2020, the EU granted 14 so-called adequacy decisions, permitting EU citizens’ personal data to flow freely between the EU and the respective trading partners, including between the countries accorded adequacy. Adequacy decisions are unilateral, complementing more commonly observed and analyzed mutual recognition arrangements for technical regulations. Using structural gravity and synthetic control methods to assess the relationship between EU adequacy decisions and digital trade, using different approaches to define digital trade, we find that adequacy increases bilateral digital trade, driven to an important extent by EU-US agreements. We also show that digital trade between adequacy-receiving countries increases, providing evidence of a ‘club effect’ associated with EU adequacy decisions.