Digital Trade Restrictions and Manufacturing Participation in Global Production Networks: The Roles of Network Position, Digital Dependence, and Cross-Border Spillovers

Digital services coordinate production networks, so restrictions on digitally enabled trade may propagate beyond the regulating economy. We model global manufacturing as a bounded system of country-sector nodes linked by fixed bilateral trade weights. The panel combines OECD Digital Services Trade Restrictiveness Index data with input-output-derived participation for 35 countries, 14 sectors, and 2014-2021 (3,904 observations). Country-sector, sector-year, and country-year fixed effects distinguish domestic regulation from partner exposure and test moderation by pre-sample network position and sector digital intensity. Country-clustered inference is supplemented by 999 restricted wild-cluster bootstrap replications. Average domestic and partner-exposure coefficients are imprecise. In contrast, partner exposure is more negatively associated with participation among top-quartile position nodes (interaction = -0.0947 per 0.1 index point; wild p = 0.007; Holm-adjusted p = 0.028). One exposure standard deviation corresponds to 3.9% of mean participation. The differential is concentrated in forward participation, persists with lagged exposure and multi-year pre-sample position, and remains negative in every leave-one-country-out estimate. It weakens under a within-country position cutoff, while sector digital intensity does not robustly moderate the association. The evidence is associational and supports a network-contingent rather than uniform account of digital trade restrictions.