An exception is the area of labour regulation where Olney (2013) and Davies and Vadlamannati (2013) find that reductions of labour standards in one country can trigger similar changes in countries nearby. Consequently, weakening privacy and personal data protection in one country to gain competitiveness in digital sectors may lead other countries to follow suit. A mechanism behind the Porter hypothesis could be selection effects whereby regulation shifts resources to the most innovative and productive firms by driving less productive firms out of the market (Qiu et al., While empirical evidence in this area is inconclusive (Ambec et al.,