Social Impact of Cross-Border Digital Trade in Bangladesh While Strengthening Fiscal Revenue for Sustainable Growth

Abstract

The rapid expansion of cross-border digital trade is transforming international commerce by reducing transaction costs, expanding market access, and enabling greater participation of small and medium-sized enterprises in global value chains. For developing economies such as Bangladesh, digital trade presents significant opportunities for economic diversification, employment generation, and social inclusion. However, the accelerated growth of digital transactions has also created new fiscal governance challenges, particularly regarding revenue mobilization, taxation, regulatory oversight, and policy coordination. Despite increasing scholarly and policy attention to digital trade, limited research has examined how digital commerce can simultaneously generate positive social outcomes and strengthen fiscal sustainability within the context of developing economies. This study proposes a Social–Fiscal Sustainability Framework (SFSF) to analyze the interconnected relationship between cross-border digital trade, social development, fiscal revenue generation, and sustainable growth in Bangladesh. Drawing upon recent international literature, policy reports, and institutional evidence, the framework integrates digital trade infrastructure, fiscal governance mechanisms, and sustainability objectives into a unified analytical model. The study finds that effective digital trade governance can expand employment opportunities, improve market access for micro, small, and medium-sized enterprises, enhance digital inclusion, and increase government revenue through modernized taxation systems. Furthermore, reinvestment of fiscal gains into digital infrastructure, education, and innovation can create a reinforcing cycle that supports long-term sustainable development. The findings contribute to the emerging literature on digital trade governance by demonstrating that social development and fiscal sustainability should be viewed as complementary rather than competing objectives. The proposed framework offers practical policy guidance for Bangladesh and other developing countries seeking to maximize the developmental benefits of digital trade while maintaining fiscal resilience.