Digital Trade and the International Division of Labor: A Literature Review and Analytical Framework from a Global Value Chain Perspective

Abstract

Driven by the rapid expansion of the digital economy, digital trade has emerged as a pivotal force restructuring international trade and reconfiguring global production networks. Distinct from traditional models centered on trade in goods, digital trade-facilitated by cross-border data flows, digital services, and platform-based transactions-has profoundly reshaped the international industrial division of labor and Global Value Chain (GVC) governance. Based on a systematic review of existing literature, this paper synthesizes key perspectives on the mechanisms through which digital trade reshapes industrial specialization and the resulting governance transformations. The analysis reveals that by reducing transaction costs, facilitating technology diffusion, and amplifying platform network effects, digital trade drives the evolution of international specialization from inter-industry division toward task-based and functional models. Consequently, GVC governance logic is shifting from control-oriented models centered on ownership and contracts toward digital governance based on rules, platforms, and data factors. However, challenges such as constraints on cross-border data flows, value distribution imbalances under platform dominance, the digital divide, and the fragmentation of international rules pose risks to the stability of digital value chains. Finally, this paper discusses future research directions and policy implications to support digital trade governance and the sustainable development of global value chains.