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There Goes Gravity: eBay and the Death of Distance
Abstract
We compare the effect of geographic distance on eBay and total international trade flows. We consider the same 61 countries and basket of goods for both types of transactions. We find the effect of distance to be on average 65% smaller on eBay. We argue this difference is due to a reduction of search costs; it increases with product differentiation and is higher when trade partners speak different languages, when corruption in the exporting country is high, and when uncertainty avoidance is high in the importing country. Moreover, eBay's seller-rating technology further reduces the distance effect on eBay.This article is protected by copyright. All rights reserved.
... At present, research into CBEC mainly focuses on the impact of CBEC on international trade costs, such as Alaveras and Martens (2015), Lendle et al. (2016), Kim et al. (2017) and Brynjolfsson et al. (2019), etc. However, some scholars have also begun to shift their research perspective to explore the impact of CBEC on international trade (Wang et al., 2017;Qin and Meivitawanli, 2018) and factors influencing the development of CBEC (Valarezo et al., 2018;He et al., 2021). ...
... This mainly focuses on the impact of CBEC on the cost of international trade, and many research conclusions agree that CBEC will significantly reduce the cost of international trade. For example, Lendle et al. (2016) comprehensively compared the impact of geographical distance on traditional international trade and CBEC based on the relevant data of CBEC trading platforms such as eBay, concluding that the impact of geographical distance on CBEC was 65% lower than that on traditional international trade. The main reason for this is that CBEC can significantly reduce the cost of searching. ...
... The costs and income of export trade are important factors for enterprises to consider when deciding whether to export (Melitz, 2003;Handley et al., 2022). The rapid development of CBEC may not only reduce export costs, including geographical distance (Lendle et al., 2016), advertising (Cho and Tansuhaj, 2011), and information asymmetry (Lendle et al., 2016), but also strengthen economies of scale and promote the improvement of export income, which will inevitably attract more enterprises to enter the export market. The influx of enterprises leads to serious "congestion" in the export market and stimulates more intense competition (Yousefi, 2015;Feng et al., 2017), then the fierce competition in the export market significantly improves the quality of a country's export products. ...
From the perspective of the implementation of China's cross-border e-commerce industrial policy, this study empirically tests the impact of cross-border e-commerce industrial policy on the quality of agricultural products exported by China through using the HS6-digit export data in CEPII-BACI database from 2006 to 2020 and adopting the Difference-in-Difference method. The research shows that the cross-border e-commerce industrial policy has a significant positive impact on the quality of agricultural products exported by China. The study also found that there is significant heterogeneity in the impact on agricultural products exported from different regions and with different quality levels. Finally, the mechanism test conclusion shows that cross-border e-commerce mainly promotes the improvement of export quality of agricultural products exported by China through export competition effect and export learning effect.
... On the other hand, the development of digital technology can reduce the costs of foreign trade enterprises in five aspects, namely, search cost, reproduction cost, transportation cost, tracking cost, and verification cost [25]. Among them, the reduction of search cost can improve the efficiency of information matching and information communication and organization [26], reducing the information cost and search cost of enterprises in international trade [23], so as to improve the quality of enterprises' export products [20]. ...
... At the meso-level, reusability and replicability of data information promote data elements to be transformed into new knowledge for unlimited reuse among export enterprises in the industry, and the open source and non-competitive characteristics of digital technology determine its extensive diffusion and knowledge spillover effect [31]. Some studies have pointed out that innovation organizations can internalize relevant technical knowledge into new products, services, or processes through absorption capacity, thus promoting green innovation performance [26]. Therefore, the development of digital economy provides a broader platform and element support for the innovative development of export industry. ...
... The large-scale application of digital technology enables enterprises to more accurately grasp the latest consumption preferences in the international market, greatly improve innovation performance, and optimize the enterprise's research and development mode through accurate insight into the massive, personalized consumption demand. It can create a broader space and platform for enterprise innovation, promote the improvement of enterprise innovation performance through digital transformation [33][34][35], and indirectly promote the quality upgrade of export products, as illustrated in Figure 2. Accordingly, this paper puts forward: studies have pointed out that innovation organizations can internalize relevant technical knowledge into new products, services, or processes through absorption capacity, thus promoting green innovation performance [26]. Therefore, the development of digital economy provides a broader platform and element support for the innovative development of export industry. ...
In recent years, Chinese manufacturing enterprises have competed to chase the wave of the “digital revolution”; digital empowerment has become an important strategic path of technological reform for many manufacturing enterprises. Based on the micro data of listed companies, this paper investigates the impact of digital transformation of Chinese listed companies on the quality of their export products. It is found that digital transformation can significantly improve the quality of enterprises’ export products. After a series of robustness tests, this conclusion is still valid, and there are two ways to improve innovation performance and total factor productivity. The export product quality enhancement effect of enterprise digital transformation also has the heterogeneity of ownership, region, and industry. Furthermore, this paper also examines the impact of digital transformation on the internal salary gap of enterprises, and finds that digital transformation may increase the internal salary gap of enterprises and form a “masking effect” on the quality of export products. To a certain extent, this paper deepens the understanding of the study of enterprise digital transformation on the quality of export products and its differences and provides certain guidance for enterprises to implement the strategy of digital transformation.
... Borenstein and Saloner, 2001;Cairncross, 2001). This is borne out by the empirical literature, which finds that e-commerce reduces distance-related trade costs (Ahn et al., 2011;Clarke, 2008;Freund and Weinhold, 2004;Hortaçsu, 2009;Lendle et al., 2016). E-commerce shrinks the distance between buyer and seller -by nearly a third according to Lendle et al. (2016) facilitating more exchange. ...
... This is borne out by the empirical literature, which finds that e-commerce reduces distance-related trade costs (Ahn et al., 2011;Clarke, 2008;Freund and Weinhold, 2004;Hortaçsu, 2009;Lendle et al., 2016). E-commerce shrinks the distance between buyer and seller -by nearly a third according to Lendle et al. (2016) facilitating more exchange. ...
... It is assumed that domestic and cross-border e-commerce grow at the same rate. Second, using the estimates of Lendle et al. (2016) that e-commerce reduces distance by a third, we back out the equivalent reduction in trade costs implied by the growth of e-commerce. ...
... With the advent of internet technology, telemedicine and telehealth may hold promise for reducing, if not eliminating, access barriers due to travel distance (Dorsey & Topol, 2016;Kvedar, Coye, & Everett, 2014). In recent years, many studies have examined the role that the Internet and other digital technologies have played in reshaping the geographic distribution of economic activities, such as international trade and social networks (Fan, Tang, Zhu, & Zou, 2018;Hortaçsu, Martínez-Jerez, & Douglas, 2009;Lendle, Olarreaga, Schropp, & Vézina, 2016;Lieber & Syverson, 2012). However, few studies have investigated patients' provider choices in online healthcare markets and the spatial distribution of online healthcare utilization. ...
... Following the empirical strategy commonly employed to study e-commerce (e.g., Hortaçsu et al., 2009;Lendle et al., 2016) and patient mobility (e.g., Fabbri & Robone, 2010), we use the gravity model to motivate our analysis. For the main estimation, we aggregate the transaction data at the province level and examine whether the volume of online medical consultations between any pair of provinces is affected by the distance between them. ...
... Most existing research has only examined the determinants of patient choices in the offline world, finding that patients make trade-offs between measured quality, price, and distance (Acton, 1975;Aoun, Matsuda, & Sekiyama, 2015;Avdic, Moscelli, Pilny, & Sriubaite, 2019;Baker, Bundorf, & Kessler, 2016;Beckert, 2018;Beckert, Christensen, & Collyer, 2012;Doyle Jr, Graves, Gruber, & Kleiner, 2015;Gutacker, Siciliani, Moscelli, & Gravelle, 2016;Jiang et al., 2020;McClellan, McNeil, & Newhouse, 1994;Nemet & Bailey, 2000). Second, our study advances the literature examining the impact of the Internet on reducing geographic barriers to economic activities (Cairncross, 1997;Fan et al., 2018;Hortaçsu et al., 2009;Lendle et al., 2016;Lieber & Syverson, 2012). Our results reinforce previous findings that geographic distance is still an important factor in people's online activities, even though the Internet has substantially reduced search frictions and transaction costs (Hortaçsu et al., 2009). ...
Telemedicine and telehealth hold promise for reducing access barriers caused by travel distance. However, little is known about how the Internet affects patients' online provider choices and thus the spatial distribution of healthcare utilization. This study investigates the effect of distance on flows of online medical consultations using a unique dataset from one of the leading third-party online healthcare platforms in China: Haodf.com. We show that the geographic distance between doctors and patients is negatively associated with online service utilization, though this effect is almost 40% ~ 50% weaker for online medical services than it is for offline medical services. We also find a strong “home bias” in which patients and doctors tend to locate in the same prefecture and in the same province. Further analyses suggest that prior in-person visits before online consultations, the potential need for a follow-up physical visit after an online consultation, and information friction may contribute to the distance effect. These findings have policy implications for improving healthcare access in China and other nations.
... My approach to capturing the impacts of digitization on trade is similar to that of Freund and Weinhold (2004), who model the impact of the Internet on trade in goods by assuming that it reduces the …xed costs of entering a particular market. It is also in the spirit of the trade literature that interprets the impact that distance has on trade as re ‡ecting search and information frictions (see, for example, Allen, 2014, andMayer, 2014), and that views such frictions as diminished by the Internet and online markets (see, for example, Lendle et al, 2016, for trade in goods, and Blum and Goldfarb, 2006, for trade in services). 7 My …ndings suggest that the WTO is perhaps better designed to deal with digital trade than is commonly believed. ...
... And for this purpose a shallow-integration approach can in principle su¢ ce. 31 Of course, in the analysis above I have abstracted from a number of challenges that a shallow approach to integration would confront in practice; 32 and in reality the line between shallow and deep integration is not as stark as my analysis makes it out to be. At a more practical level, therefore, and as I emphasized earlier, the message in this case is not so much that no degree of deep integration is necessary in a digital world, but rather that the existing market access orientation of the WTO can provide a potentially useful guardrail to delineate the "depth" of integration that trade agreements should contemplate in the digital world: according to the …ndings above, and just as in the pre-digital world, there is no reason for a trade agreement in the world of digital trade to go deeper than what is required to ensure that property rights over negotiated market access are reasonably secure. ...
... But at least in principle, existing WTO rules are well designed to handle these issues, because these issues are not new to the digital age. The …rst 31 Interestingly, adopting a very di¤erent modeling approach that features monopoly platforms and two-sided markets for platform services and focuses on the particular issue of privacy protection, McCalman (2021) comes to a similar conclusion that shallow integration may su¢ ce for issues related to digital trade. 32 See Staiger and Sykes (2021) for a discussion of a number of these challenges in the context of a shallow-integration approach to the liberalization of trade in services. ...
... An emerging branch of this vast literature has recently highlighted the prominence of search frictions in (international) goods trade Chaney, 2014;Lenoir et al., 2018), acknowledging that it takes time and resources for an exporter to learn about market conditions elsewhere, to find customers abroad or, symmetrically for an importer to match with the right supplier. Furthermore, this literature has also documented how the diffusion of information and communication technologies (ICTs) reduced such frictions (Jensen, 2007;Aker, 2010;Goyal, 2010;Lendle et al., 2016;Bhuller et al., 2019). Chapter 1 and Chapter 4 of this dissertation directly contribute to this strand of the literature. ...
... While the theoretical approach developed herein is in the spirit of trade models Lenoir et al., 2018) where firms undergo a random search process, it incorporates agency frictions that replace traditional iceberg transport costs. Finally, some recent papers explore how the diffusion of information and communication technologies -including Broadband Internetaffect such frictions Lendle et al., 2016;Magouyres et al., 2019;Bhuller et al., 2019). My contribution to this literature is twofold. ...
... et trouver des clientsà l'étranger ou, symétriquement,à un importateur pour trouver le bon fournisseur. En outre, cette littérature aégalement montré comment la diffusion des technologies de l'information et de la communication (TIC) peut réduire ces frictions (Jensen, 2007;Aker, 2010;Goyal, 2010;Lendle et al., 2016;Bhuller et al., 2019). Les chapitres 1 and 4 de cette thèse contribuent directementà cette branche de la littérature. ...
This thesis consists of four chapters that study how imperfect information affects both credit and goods markets. The contribution of chapter 1 is to extend the study of search frictions to credit markets. Motivated by empirical evidence I document on local credit markets in France, I propose a theory of firm-bank matching subject to search frictions. I estimate structurally my model on French data using the staggered rollout of Broadband Internet, from 1997 to 2007, as a shock that reduced search frictions. I show that both the allocation of credit the cost of debt for small businesses were affected by this shock. In chapter 2, we document that banks specialize locally by industry to reduce asymmetric information, and that this specialization shapes the equilibrium amount of borrowing by small firms. For identification, we exploit the reallocation of local clients from closed down branches to nearby branches of the same bank. We show that branch reallocation leads, on average, to a decline in small firm borrowing that is twice larger for firms reallocated to branches less specialized in their industry than the original one. In chapter 3, we study the macro implications of credit relationship flows. We show that banks actively adjust their lending supply along both extensive and intensive margins and that gross flows associated with credit relationships (i) are volatile and pervasive throughout the cycle, and (ii) can account for up to 46% of the cyclical and 90% of the long-run variations in aggregate bank credit. We also highlight the role of the extensive margin in the transmission of monetary. Finally, we study in chapter 4 the role of Broadband Internet in reducing search frictions faced by French importers. We use the staggered rollout of broadband internet to estimate its causal effect on the importing behavior of affected firms. We find that broadband expansion increases firm-level imports by around 25%. We further find that the “sub-extensive” margin (number of products and sourcing countries per firm) is the main channel of adjustment
... For research intent on substantiating the true nature of this relationship, economic globalization has been held as a case in point. Distance has been reported to have its influence fade over time as evidenced by the sharp drop in long-distance shipping costs that has accompanied advances in transportation and information systems (Bleaney and Neaves 2013;Buch et al. 2004;Coe et al. 2002Coe et al. , 2007Glaeser and Kohlhase 2004;Hummels 2007;Knowles 2006;Lendle et al. 2016). Cairncross (1997) went as far as proclaiming the "death of distance". ...
... Since the cost of moving goods over space has declined remarkably with the upgrading in the transportation system (Glaeser and Kohlhase 2004;Hummels 2007;Knowles 2006), it is expected that the inverse trade-to-distance relationship would become weaker as economic globalization proceeds. A number of studies have presented evidence in support of this view (Bleaney and Neaves 2013;Coe et al. 2002;Lendle et al. 2016). However, numerous country-level gravity modeling studies have presented opposite empirical evidence that the distance friction has remained robust and, sometimes, even gained strength. ...
We explore how the hub-and-spoke system in the international freight transportation network contributes to the global shrinkage of space. The friction in long-distance trade routes varies by the location of shippers and nodal characteristics of traversed ports, and is mitigated by the quality of scale economies driven by the hub-and-spoke distribution system along the trajectory of the logistic process. In order to confirm the shrinkage of space brought about by the hub-and-spoke shipping economies through transshipment routes via hub ports, we examine disaggregated cross-Atlantic cargo shipping trajectory data from Europe to the U.S. recorded both on landside and seaside with a discrete choice model. The results present that hub-and-spoke shipping economies arise with the scales of landside and maritime port operations and with shipping line diversity. Generally, they are found to offset distance friction that occurs along landside and maritime shipping voyages, but hub-and-spoke shipping economies arise differently depending on how hub-and-spoke configurations are set. They mainly stem from larger scale of ports’ operation and more diverse shipping lines serving the final port of export. The hub-and-spoke system is confirmed as a main driver of global shrinkage of space in terms of long-distance commercial activities.
... To this end, we can analyze the direct effect of the digital economy on export trade from the following two dimensions: First, the digital economy can reduce the cost of city export trade. New Economic Geography believes that trade cost is the key to trade location selection, spatial agglomeration, and diffusion of economic activities [13,14], while export growth mainly comes from the reduction of cross-border trade cost [15][16][17]. Generally speaking, trade costs mainly include transaction costs, search costs, communication costs, and transportation costs [18]. ...
... Analyzing the benchmark regression results, it shows that the digital economy significantly promotes city export trade, which is consistent with the research results of Lendle et al. [15], Goldfarb and Trefler [18], and Fan et al. [14]. They all concluded that digital technologies can reduce trade costs and expand the market boundaries of trade, thus the development of the digital economy is conducive to export trade. ...
The development of the digital economy is conducive to the innovative development of foreign trade and the formation of a “dual circulation” development pattern in China. Based on the panel data of 285 prefecture-level cities in China from 2005 to 2019, this paper examines the influence of the digital economy on urban export trade and its heterogeneity. And we use a mediating effect model to explore the possible mediating role of technological progress in the above influences. The results find that: (1) The improvement of the digital economy can promote cities export; (2) The promotion of the digital economy to the growth of city export scale is heterogeneous, which is more significant in the western and northeastern cities with relatively remote geographical locations, and the third-tier and lower cities with relatively backward economic development. (3) Technological progress has played a significant role in promoting the growth of export for the digital economy. Thus, it’s of great importance for China to increase investment in digital economy infrastructure and pay more attention to the differences in diverse city development processes. It should also support basic research and development in information technology to promote high-quality development of China’s foreign trade through the digital economy.
... Likewise, Lendle et al. (2016) and Li et al. (2019b) viewed e-commerce as a powerful means to enable SMEs to go through global market directly. Ecommerce allows them to focus on the highest valueadded activity that is often associated with research and development (R&D) and marketing. ...
... For example, Shopee Indonesia has created Shopee Export Campus to facilitate Indonesian SMEs in identifying their competitiveness as well as navigating into global market (Suyanto et al., 2021). Against this backdrop, building cross-border e-commerce for Indonesian SMEs must be done on an incremental basis, and should come along with the readiness of Indonesian SMEs (Lendle et al., 2016;Rahayu & Day, 2017). ...
After recording remarkable growth and gaining more prominence within the domestic economy, Indonesian small and medium enterprises (SMEs) are now being pushed by the government to go beyond the domestic market. Indonesian government has introduced global value chains (GVCs) to SMEs to boost their export in the last recent years. Apparel SMEs normally can join GVCs through backward or forward participation. But in this case, the GVCs’ impact on apparel SMEs export remains sluggish because they are highly concentrated in forward participation. This research, therefore, provides empirical cases on how Indonesian apparel SMEs can engage in backward participation to raise their competitiveness in global market using the evidence of apparel SMEs. Utilizing three dimensions of GVCs analysis: governance, upgrading, and local policy network, this research finds that SMEs can easily engage in backward participation to obtain foreign inputs by using the internet. Moreover, the decision to venture into GVCs and global market is heavily influenced by e-commerce. Findings of this research can provide guidance for Indonesian policymakers about the importance of GVCs on SMEs’ export performance, creating a better environment for manufacturing and cross-border e-commerce that can be exploited by SMEs as the largest economic driver.JEL Classification F59; F63; L67
... The OECD Digital Services Trade Restrictiveness Index (DSTRI) highlights that several measures continue to affect the environment for cross-border electronic transactions across the economies it covers (Figure 16). 20 Specific licenses or authorisations for e-commerce activities, in addition to ordinary business licenses, are required in six countries, and in four of them, discriminatory conditions apply for foreign entities seeking to obtain such licenses. Implementing international standards for electronic contracts remains a challenge across the board, although key electronic authentication measures, such as recognition of electronic signatures, are generally in place. ...
... Online tax registration and declaration are also not possible in one-third of the countries (Ferencz, 2019 [35]) (OECD, 2020 [36]). 20 The OECD STRI provides information on regulations affecting trade in services in 22 sectors across all OECD member countries and Brazil, the People's Republic of China, Costa Rica, India, Indonesia, Malaysia, the Russian Federation, South Africa, and Thailand. These countries and sectors represent over 80% of global trade in services. ...
Today, more parcels are crossing international borders than ever before. While this has given rise to new opportunities, not least for individuals and SMEs who are now more directly engaged in trade, it is also raising new challenges. This paper explores this complex and evolving environment, identifying the types of goods that are traded as parcels and the different actors along the parcels supply chain, as well as the policies to help ensure that parcels get to where they are needed. Empirical analysis shows that progress on digital connectivity and trade facilitation measures, such as increased transparency or automating border processes, are likely to have a greater trade-enhancing impact on parcel trade than on "traditional" trade. In contrast, greater differences in regulations across countries in transportation, courier or logistics services are associated with lower trade in parcels. Overall, enabling benefits from trade in parcels and facing forthcoming challenges requires a comprehensive policy approach across a number of areas and throughout the parcel supply chain.
... Most of which believe that 'Internet+' is playing a positive role, especially in firms' innovation (Chen, 2013;H. Li et al., 2014;Yang & Liu, 2018) and management efficiency (Lendle et al., 2016;Shi & Li, 2020;Zhao et al., 2020). Some other studies believe that 'Internet+' is neutral for firms and capital markets (X. ...
... Li et al., 2014). Secondly, Internet can extend the selection range of suppliers, reduce information searching costs and transaction costs among stakeholders (Ju et al., 2020;Lendle et al., 2016), and then help firms focus on their specialised area and major business (Brynjolfsson et al., 1994;Shi & Li, 2020). Thirdly, under the sharing economy developed by 'Internet+', customers no longer have to purchase products to gain the right of use (Lovelock & Gummesson, 2004). ...
Based on the data of firms opening stores on e-commerce platforms and DID regression model, we investigate the impacts of ‘Internet+Sales’ on management forecasts. In the view of accounting information transmission efficiency, ‘Internet+Sales’ can upgrade firms’ information technology and enhance managers’ ability to obtain earnings information, which help improve the timeliness of forecasts. However, in the view of sales uncertainty, ‘Internet+Sales’ will impact firms’ traditional sales activity and raise the difficulty for managers to estimate future earnings performance, which causes a decrease in the accuracy of forecasts. Moreover, we also find a decrease in customer concentration in these firms, and a better performance in forecast accuracy in the e-commerce platforms with less sales uncertainty policy, indicating that uncertainty can affect forecast accuracy. This paper provides specific evidence on how ‘Internet+’ affects management disclosure, and can help stakeholders have a better understanding of ‘Internet+Sales’ business model.
... According to Hagsten and Kotnik (2017), basic ICT tools such as websites are more effective for accessing foreign markets than advanced ones, such as e-commerce. There is also evidence that digital platforms, such as Alibaba and eBay, are helpful for SMEs trying to enter foreign markets (Jin & Hurd, 2018;Lendle et al., 2016). Finally, regarding Spanish firms, Nieto and Fernández (2005) report that selling online to other businesses increases SMEs' export intensity, while selling to end consumers or having a website has no effect. ...
This study examines the impact of digitalization on the participation of small and medium-sized enterprises (SMEs) in export and import activities. Using data on Spanish manufacturing SMEs from 2001 to 2014, we construct a multidimensional firm-level index of digitalization. We then estimate a set of dynamic models analyzing the direct and indirect (via total factor productivity) effects of digitalization on firms’ export and import strategies. We find evidence that firms’ digitalization positively influences the probability of exporting and importing, both directly and through productivity. We find that productivity has a stronger impact on SMEs’ trade behavior than the direct channel of digitalization. A one standard deviation increase in the digitalization index increases the probability of exporting and importing by 1.5 and 0.8 percentage points, respectively, while the same increase in the logarithm of productivity has a three times greater effect for exporting and nine times greater for importing.
... We measured the home country's digital infrastructure by using the Network Readiness Index provided by the World Economic Forum, which captures the development of ICT infrastructure (including network coverage, international Internet bandwidth, and secure Internet servers). With regard to foreign market Internet penetration, we derived our data from the World Bank World Development Indicators (Freund & Weinhold, 2004;Lendle et al., 2016) and matched these with the firm-level data obtained from the Flash Eurobarometer database, which provided the names of countries where firms engaged in CBEC sold their products/services. This allowed us to calculate the average Internet penetration rate of all countries where the firm had online export sales. ...
Despite voluminous research on barriers to exporting, knowledge on the inhibiting role of specific obstacles confronted by firms when exporting via cross-border e-commerce (CBEC) is virtually absent. Using data from a cross-industry sample of 1256 firms located in 25 different European countries, we shed light on this issue by examining the organizational determinants and performance outcomes of CBEC barriers. The results revealed these barriers are more evident in the case of firms with smaller size, lacking experience, and having no affiliation with other companies. It was also found that all different types of CBEC barriers, namely financial complexities, coping with foreign markets, supplier restrictions, technical difficulties, and product limitations, are negatively affecting online export performance. Finally, both the home country’s level of digital infrastructure and the foreign market’s Internet penetration rate exhibited a strong moderating effect on the association between CBEC barriers and export performance.
... (1) Digital Elements Reduce the Transaction Cost of Service Trade Bakos [22], Rauch [23], and Anderson and Van [24] have pointed out that the popularity of networks reduces the cost of information searching and that exchange in trade leads to the development of international trade. Lendle et al. [25] and Chen [26] pointed out that the Internet and e-commerce can create new markets and new products. Ferencz [27] further points out that the transformation of digital services helps to realize online services provided by service trade, improving the efficiency of the service supply. ...
China’s economy began as one of high-speed development and has since advanced into a period of high-quality enhancement as driven by the services trade. Data elements are important for promoting services trade. In this paper, we present a literature review of the digital services trade and its development, as well as the main mechanisms of the data factors influencing the services trade. Second, by adopting methods for the combination of qualitative research with quantitative research, we summarize the main advantages of China’s high-quality services trade and identify the key data elements involved. We find data elements play a key role in China’s services trade development. Third, we analyze the main path of data affecting services trade development at the micro level. We then examine the specific case of the Meorient digital innovation service through a case analysis method. From this analysis, we conclude that digital internal and external dual wheels drive enterprise development and that the digital platform unlocks a new business model for the exhibition of science and technology investment to build a digital ecological symbiotic group. These findings provide a reference for the digital transformation of other service trade enterprises. Finally, we propose a means by which to strengthen digital infrastructure by consolidating the industrial foundation of the services trade and by improving the tradability of service products, domestic digital supervision, and the governance system.
... 8 This is also consistent with the findings of DeBruine (2002), who finds that, although individuals exhibit greater trust in others with similar facial features to themselves, they are no less likely to betray facially similar partners. 9 Lendle et al. (2015) also document that geographic distance's impact is relatively small on eBay, focusing on international transactions on the platform versus other trade flows. 10 Previous researchers have also considered the effects of cultural and social distance on trade across countries. ...
We use eBay data to investigate how within-U.S. trade is influenced by differences in socioeconomic characteristics. States’ similarity in cultural characteristics (ethnicity, religious affiliations, and political behavior) predicts online trade; cultural similarity similarly predicts trade within product categories. The culture-trade relationship is stronger for transactions with sellers who lack extensive reputations or certification, suggesting that consumers infer seller trustworthiness from cultural similarity. There is no correlation between cultural similarity and buyer satisfaction, suggesting that perceived differences in trustworthiness are not validated in actual transactions.
This paper was accepted by Alfonso Gambardella, business strategy.
Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2023.4681 .
... Lendle and Olarreaga, et al. (2018) [18] , reduce the information cost and search cost of enterprises in international trade. Olarreaga M (2016) [19] . Thus, the quality of enterprises' export products can be improved (DeStefano and Timmis, 2021) [13] . ...
In recent years, Chinese manufacturing enterprises compete to chase the wave of "digital revolution", digital empowerment has become an important strategic path of technological reform for many manufacturing enterprises. Based on the micro data of listed companies, this paper investigates the impact of digital transformation of Chinese listed companies on the quality of their export products. It is found that digital transformation can significantly improve the quality of enterprises' export products. After a series of robustness tests, this conclusion is still valid, and there are two ways to improve innovation performance and total factor productivity. The export product quality enhancement effect of enterprise digital transformation also has the heterogeneity of ownership, region and industry. In the further study, this paper also examines the impact of digital transformation on the internal salary gap of enterprises, and finds that digital transformation may increase the internal salary gap of enterprises, and form a "masking effect" on the quality of export products. To a certain extent, this paper deepens the understanding of the study of enterprise digital transformation on the quality of export products and its differences, and provides certain guidance for enterprises to implement the strategy of digital transformation.
... However, it also increases vulnerability, as GVCs were an essential channel of economic contagion during the COVID-19 pandemic (Coveri et al., 2020). 1 The primary mechanism has been through reducing frictions in international trade (Johnson & Noguera, 2017) and improving coordination and reducing location specificity of human capital (Autio et al., 2021). Lendle et al. (2016), for instance, show that the effect of distance is 65% smaller on a digital platform such as eBay. 2 The concept of a GVC is sometimes seen as too narrow, a criticism that has seen the concept of a Global Production Network (GPN) being elaborated. The latter focus on the broad networks involved in global production-see the discussion in Coe et al. (2008). ...
The digital (or 4th industrial) revolution has made industrialisation harder by being less consequential for structural transformation than was initially hoped. The rise of digital platform capitalism and its relation to global value chains (GVCs) is responsible for this. This paper explains why diminished expectations of the 4th industrial revolution are justified and how this is due to digital platforms as intellectual monopolies that are reconfiguring GVCs—and by this, making industrialisation harder. As such, the paper contributes to the research lacuna on the relationship between GVCs and digital platform capitalism. The implications for late industrialisation are identified, and broad recommendations for industrial policies are made.
... Most of this literature focuses on the digital economy's impact on macro and micro economies. At the micro level, digital economy reduces the cost of economic activities, including search and replication costs [6,7] as well as transportation [8,9], tracking [10], and verification costs [11,12], promoting enterprise green technology innovation [13], household consumption upgrading [14], and enterprise digital transformation [15]. At the macro level, the digital economy based on Internet technology has a significant impact on China's total factor productivity [16], inclusive growth [17] and regional integration level [18]. ...
China is in a critical period of economic restructuring and optimization, and the vigorous development of the digital economy plays a vital role in the transformation and upgrading of the industrial structure. Using the panel data of 249 prefecture-level cities from 2011 to 2018, this study empirically investigates the relationship and mechanism between digital economy and industrial structure upgrading. The results show that the digital economy significantly promotes the upgrading of the industrial structure, and this conclusion is still valid after robustness tests such as selecting historical data as instrumental variables. The analysis of the mechanism of action shows that the improvement of labor efficiency and the promotion of technology spillover are the important mechanisms of the digital economy to promote industrial structure upgrading. Finally, the study of regional differences shows that the eastern region has the most obvious promotion effect of digital economy development, the central region is the second, and the western region has the least impact. The research here promotes the understanding of the motivation of industrial structure upgrading and the effect, mechanism, and regional differences of the digital economy enabling the development of a modern industrial system.
... The development of the world economy is inseparable from and heavily dependent upon e-commerce. One of the major advantages of e-commerce is that it effectively reduces the trade-related cost, which increases the attractiveness of business interaction between countries and promotes the development of the international economy (Lendle et al., 2016;Gomez-Herrera et al., 2014). It could also act as a trade facilitator that eliminates distance costs and reduces information friction of online marketplaces (Leamer, 2007). ...
Purpose
While blockchain is considered to have many unprecedented characteristics, and its application is recognized as another new opportunity for the development of e-commerce, there is limited evidence on the factors affecting the adoption of blockchain in the commercial e-commerce sector. This study aims to identify determinants influencing consumers' intention to adopt blockchain technology in e-commerce.
Design
/methodology/approachDrawing on the classic technology acceptance model (TAM), a conceptual framework is developed and empirically assessed to present the relationships between the core characteristics of blockchain and consumers' adoption intention. Survey data were collected from 228 users of the blockchain e-commerce system in China. The structural equation modeling (SEM) approach is used to test the hypotheses.
Findings
The results indicate that cost saving and traceability have a positive effect on perceived usefulness while insignificant associations are found between data privacy security and perceived usefulness, and perceived ease of use and consumers' adoption intention.
Research limitations/implications
The research only examined Chinese users, which may affect the generalizability of the findings. Future research is encouraged to conduct comparative studies beyond this region, e.g., emerging markets versus developed economies. It would also be useful to explore mediating and moderating effects of other new technologies that complement the application and adoption of blockchain.
Practical implications
The research results also bring managerial implications with the ways of attracting customers via blockchain technology, including improving system ability to reduce cost and enhance traceability.
Originality/value -
This paper is one of the early empirical endeavors that examines determinant factors affecting individual users towards the adoption of blockchain technology in e-commerce that is absent in the extant research. This study further contributes to the development of the knowledge bank of blockchain via the conceptual framework of its adoption under the e-commerce context, in particular considering its technical features.
... The new technologies affect internationalisation processes of firms in terms of accessibility of foreign markets as well as of potential for resources, skills, and competencies acquisition from abroad (Hervé et al., 2020). According to a large stream of literature, broadband Internet has fostered countries and firms' participation in international trade of goods and services, by reducing information-search and communication costs between buyers and sellers (Clarke & Wallsten, 2006;Freund & Weinhold, 2004;Lendle et al., 2016). At the same time, widespread use of internet to support business processes allows both small and large companies to gain more equal access opportunities to world markets. ...
This study investigates the role of digital capacities in the internationalisation processes of Italian provinces using a panel dataset built upon the territorial statistical database of ISTAT (Italian National Institute of Statistics) for the period 2014–2017. The purpose is to explore the link between three internationalisation indicators (export value, export intensity and export in most dynamics sectors) and two ICT drivers (use of e-business digital technologies, such as cloud computing, and use of social media) expected to enable firms to share information along the supply chain and to ease firms’ communication and fixed cost investment. To purge the analysis from unobserved determinants of export performance and ICT adoption reverse causation problems, the identification relies on an instrumental variables approach that addresses the endogeneity of our two variables of interest related to ICT. The results show a significant relationship between the ICT capacities related to cloud adoption and our export indicators confirming the role of e-business digital technologies in explaining the export performance of Italian provinces. The use of social media also appears weakly able to impact on the export performances indicators. These results are robust to our endogeneity checks.
... Today, almost all coastal countries, including lower-income countries, use this infrastructure to get access to broadband Internet (Hjort and Pouslen, 2019;Cariolle, 2021;Srinivasan et al., 2021). As a result, broadband Internet has plausibly prompted the 'death of distance' between trade partners, fostering countries' and firms' participation in international trade of goods and services, by reducing information, search, and communication costs between buyers and sellers worldwide Weinhold, 2002, 2004;Clarke and Wallsten, 2006;Lendle et al., 2016). SMC rollout has stimulated the development of cheaper and faster telecommunications, including broadband Internet, spurring the digitisation of information and communication contents and the digitalisation of economic interactions (Tang, 2006;Weller and Woodcock, 2013;Hjort and Poulsen, 2019). 1 ...
... The rapid penetration of digital trade enables new forms of trade protection. Conflicts occur among countries when digital regulations at the international level are inconsistent with the regulations at the national levels [12,13]. Governments prefer to adopt a wide range of domestic policies to protect the interests of domestic individuals and businesses by setting up cumbersome admission procedures, restricting Internet access and impeding the free data and other regulatory policies and measures. ...
ICT has become an important support for the booming trade in services in the digital era. However, the extent to which trade activities can benefit from ICT will depend on the regulatory constraints and the market-openness level of the ICT market. This study empirically examines the impact of ICT market openness on digital service exports on the basis of bilateral trade data at the industry level from 2007 to 2019 from 50 countries. The results show that: (1) ICT market openness seeks the combination of effective regulation and moderate openness, which is mainly reflected in three policy areas: improving information interconnection and sharing, reducing access restrictions and promoting fair competition; (2) The ICT market openness in both exporting and importing countries can significantly boost digital service exports, but in different ways. Exporting countries expand digital service exports mainly by promoting fair competition, while importing countries have the most obvious positive impact on exports through the reduction of access restrictions; (3) The greater the gap between the ICT development levels, and the lower the bilateral risk levels between the two trading countries, the greater the marginal effect that ICT market openness will have on the promotion of digital service exports. Thus, improving market openness indicates an important direction for ICT regulatory reform, but the impact on digital service exports will vary by specific policy area and by trading-partner country.
... In addition, there will also increase in share of service imports of manufacturing output (Bekkers et al., 2021). On the part of transaction cost, it has been ascertained that trade costs online are lesser compared to offline trade (Lendle et al., 2016). ...
Trade can serve as a major transmitter of economic disruption across the globe and a tool for quick recovery in times of crisis. While the pandemic disrupted trade activities globally in global merchandise, the traditional mode shifted grounds to digitalization embracement in trade activities. Therein, the concern that this development may further aggravate the catch-up effect of the developing countries like Nigeria is a serious issue due to their deficient digital technological facilities. Although, ICT industries experienced tremendous growth during and post Covid-19 eras in Nigeria. This paper is a desk review investigation carried out on the methods of trade during the pre-and-post Covid-19 era. The data revealed that there was decrease in trade pattern during and post-era of the Covid-19 pandemic globally and in African countries (Nigeria). It was therefore concluded that unlike the pre-Covid-19 trade experience, there was increasing migration of trade to digital network in the era-and-post-Covid-19 period. The paper thereby recommends digitalization of trade activities in forestalling breakdown of trade activities during the post-pandemic era.
... The internet facilitates information dissemination, removes intermediaries, increases business outreach and helps to create a global reputation (Fernandes et al., 2019;IADB, 2014;ITC, 2016;Lendle & Olarreaga, 2017). Furthermore, Clarke (2008), Freund and Weinhold (2004), Hortaçsu et al. (2009), Ahn et al. (2011 and Lendle et al. (2016) show that access to the internet improves export performance in developing countries through reduced search costs and decreased distance barriers. Connectivity to the internet is also a tool for increasing firm productivity, especially for smaller and less innovative firms (Clarke & Wallsten, 2006;Lin, 2014;Osnago & Tan, 2016;Paunov & Rollo, 2016). ...
While it is well known that the adoption of information technology facilitates the integration of enterprises into global value chains (GVCs), it is unclear how this relationship changes in different business environments. This study reveals that while the adoption of information technology facilitates micro‐, small‐, or medium‐sized enterprises which are located in an improved‐quality business environment to participate in GVCs, it does not help the micro‐sized enterprises located in a low‐quality business environment to become integrated into GVCs. Therefore, information technology policies should be complemented by policies which improve the business environment to promote smaller enterprises to be integrated into GVCs.
... Focusing on international trade, the literature has documented that the value and amount of trade are inversely related to the distance between the locations of the parties involved in the trade transaction (Lendle et al. 2016). This is because the further the distance between the parties, the higher are the costs of communication and trade arrangements. ...
... The costs of searching information (on consumer preferences, business opportunities, and productivity-improving technologies) have dropped severely due to digital search platforms. Lendl et al. (2016) have proved that a digital market platform like eBay reduced the negative impact of physical distance on market transactions by two-thirds. Online housing search substantially reduces the role of real estate agents. ...
The first of both short essays deals with two structural constraints that distinguish services markets from e.g. markets for manufacturing products. The 'nearness restriction' requires that producer and consumer of the service product are present on the same location. The 'non-storability restriction' is even more binding and requires that producer and consumer are present at the same time (synchronicity); the implication is that the consumer is a co-producer. Services branches differ with respect to the binding intensity of both restrictions. The nearness and non-storability limitations define a services market in space and time, with impacts for market functioning, productivity (capacity use) and product tradability. Technological trends, especially digitalisation are oriented at relieving the bindingness of both restrictions, and indirect also of the co- producer role for the service consumer. The second essay links the services market characteristics to the role of the a priori product quality uncertainty, which always drove product market regulation by local and national authorities. Regulatory differences between countries nowadays are an important obstacle to international services trade.
... Anson et al. (2019) investigated exchange rate pass-through in online shopping. The influence of distance or virtual proximity on cross-border EC has been examined by Hortaçsu et al. (2009), Gomez-Herrera et al. (2014, Hellmanzik et al. (2015), and Lendle et al. (2016). 1 These studies consistently found that geographical distance mattered not only in offline transactions but also in online transactions. ...
This study aims to empirically investigate the role of E-commerce (EC) on the trade impacts of COVID-19. To this end, we estimate gravity equations for bilateral trade among 34 reporting countries and their 145 partner countries during January–August in 2019 and 2020. Our major findings can be summarized as follows. A larger number of confirmed cases or deaths in both importing and exporting countries significantly decrease international trade. However, we found that EC development in importing countries contributes to mitigating this negative effect of COVID-19 on trade while that in exporting countries does not. These results are robust for our use of multiple measures of EC development.
... This assumption led to expectations of decrease in trade elasticities in the 1990s which was characterized by improved communication technologies (Cairncross & Cairncross, 1997;Friedman, 2007). Although numerous academic papers early failed to provide evidence of this assumption (Disdier & Head, 2008;Rauch, 1999), Lendle et al. (2016) found that the effect of distance on eBay is less than on total international trade due to reduced search costs through the website. ...
This paper investigates the interaction between Internet access and language similarities in international trade. We apply recent developments in gravity analysis to bilateral export data from about 205 countries over the period 1954–2014. We find a positive impact of both the Internet and language similarities, but a negative interaction between them in international trade. Our results reveal that the language elasticity of trade is lower when more people have access to the Internet and that the impact of the Internet is lower when the trading partners use similar languages. Our results also pass a number of robustness checks.
... Similar to the impact of ICT on trade Weinhold, 2002, 2004;Allen, 2014;Fernandes et al., 2019;Ndzendze and David,2019), CBEC reduces transaction cost and weakens the hindrance of distance (Hortacsu et al., 2009;Lendle et al., 2016), therefore CBEC affects exports positively (zhongwei, 2017), especially for SMEs (OECD, 1999;Jansen et al., 2016). The shortcomings of the existing literature are: despite much discussion about CBEC, there is a lack of a systematic framework for analyzing the impact of CBEC on exports. ...
The impact of cross-border e-commerce (CBEC) on international trade is prominent in recent years. The authors extend the international trade model with heterogeneous firms to include CBEC export and deduce that CBEC lowers the capability threshold for export. Firms and regions with different capabilities are affected differently, but the total regional export is increasing. In the empirical analysis section, they use panel data from 31 provinces in China from 2015 to 2018 and construct proxy variables for CBEC with CBEC comprehensive pilot zones and CBEC exporters. They find that CBEC contributes to economic growth and economic convergence. The underlying mechanisms include the convergence of regional exports and total factor productivity, while the convergence of capital isn't supported by the results.
We use data from PayPal to study the geography of online payment activity. An empirical gravity model finds a distance elasticity of −0.58 for payment value, a result that is 40% lower than typically observed in conventional trade data. The firm‐extensive margin is approximately half as sensitive to distance. The link between the scale of merchants' exports and transaction distance is considerably weaker than observed in conventional international trade data. Zipf's Law holds for PayPal merchants in some countries, but fails in smaller PayPal markets. Merchants' account ages only marginally affect the scale and average distance of their export sales.
Digitalization and the rise of the platform economy are rapidly changing the way in which firms do business. A strong business ecosystem is necessary to manage this change. This year’s SME Competitiveness Outlook tells how to build it.
The report combines data analysis, academic insights, thought leader views and case studies to guide policymakers, businesses, and trade and investment support institutions in designing the business ecosystem that is necessary for small businesses to embrace and benefit from industry 4.0.
This edition includes 50 country profiles on SME competitiveness, with a focus on strengths and weaknesses in the business ecosystem.
In the era of the digital economy, cross-border e-commerce is a specific embodiment of “internet plus international trade.” Based on the promoting policy of “The product lists of cross-border e-commerce retail imports” and Chinese customs transaction data, this study uses a difference-in-differences methodology to analyze the effects of cross-border e-commerce on China's import trade. The results show that the implementation of the cross-border e-commerce policy has significantly contributed to the growth of import value, price, and quantity. The promoting effects mainly derive from the intensive margin of imports and the extensive margins of importing source countries. Digital technology and development determine the policy's effectiveness. The heterogeneous effects of import source countries and domestic import regions imply an enlarging inequality effect from cross-border e-commerce and the digital economy.
Ocean-based manufacturing (OBM) is closely related to the advancement of information technology, and the dramatic expansion in Internet access necessitates an analysis of the Internet’s impact on marine economy. Combining firm-level manufacturing census data with provincial-level Internet development data, this study is the first to examine how Internet penetration across China’s provinces in the 1999–2007 period influenced exports in OBM. The results indicate that the Internet rollout boosted exports in OBM firms, showing a significant technology-driven effect. Furthermore, the effects of the Internet on micro-behavior differ significantly between OBM and non-OBM firms. For OBM firms, the results suggest that the main mechanism at work is a productivity effect rather than a scale effect, whereas the results for non-OBM firms suggest the opposite. This study also emphasizes the cross-regional and cross-industry heterogeneity in the effects. The heterogeneity analysis supports a greater impetus of the Internet on capital and technology-intensive marine industries and non-state-controlled OBM firms. Moreover, the improvement of Internet penetration can significantly promote participation in international transactions by OBM firms in large- and medium-sized cities. Compared with the Bohai Rim Area, the southern region, including the Yangtze River Delta and the Pearl River Delta, has shown more rapid growth in marine industries due to the Internet rollout.
This chapter presents a review of the determinants of specialization and the main trends in international trade. Globalization, trade agreements, new economic poles, and regional integration represent the most influential trends in international trade. Research in this field shows that the main determinants of specialization are demographic change; advances in technology, investment, and energy; and natural resources. Each of the mentioned determinants of specialization and trends will be discussed and constitute a separate section with relevant research and key findings.
This study explores the impact of Internet penetration on the firm‐product‐level behavior of multi‐product exporters. While a substantial body of literature has explored the effect of the Internet on firm performance, especially extensive and intensive margins, few studies examine the product‐level behavior within firms. Using highly disaggregated firm‐product‐level data covering Chinese manufacturing industrial firms from 2000 to 2007, we provide evidence on the effects of the Internet on product mix and product switching within firms. Specifically, because of the reduction in export market entry costs, the Internet can encourage more firms to enter the export market and increase market competition, which causes multi‐product exporters to skew exports toward best‐performing products and drop the products furthest away from its core competence. Meanwhile, the Internet can increase multi‐exporters’ productivity and encourage firms to introduce new products, which are also further away from the core product. Productivity and competition cause multi‐product exporters to exhibit product switching, which results in the expansion of product scope.
This study analyses the impact of international trade on the gender gap in labour force participation while considering the moderating role of information and communication technologies (ICT). Our analyses of panel data from 79 developing economies over 2006–2019 reveal that international trade narrows gender gap, and the interaction between trade and ICT is likely to widen it. Further, the impact of these two parameters on the gender gap varies across economies by development level and region. Developing economies should strategically focus on trade promotion and adopt gender-equitable ICT development policies to narrow gender gap.
China’s digital economy experienced a rapid development over the past two decades. How can we systematically measure the contribution of the digital economy to China’s economic growth? Has the digital economy contributed to an increase in China’s total factor productivity? This paper analyzes the impact of the information and communication technology (ICT) development on China’s economic growth since its WTO accession in an aggregate production possibility frontier framework. Our empirical analysis shows that the digital economy has been the most significant contributor to China’s economic growth and productivity improvements over the past two decades. Nevertheless, due to severe capital misallocation across industries and persistent inefficient performance of some non-ICT industries, industries with high investment growth have not been matched by industries with high TFP growth.
This paper investigates how Chinese manufacturing exports respond to destination countries' digital trade barriers. Using Chinese Customs data from 2014 to 2018 and data on countries' digital service trade restrictiveness by the OECD, we find that Chinese total manufacturing exports drop by 2.32%, or $30.92 billion, due to the increase in destination countries' composite digital trade barriers from 2014 to 2018. A further decomposition shows that the reduction is mostly explained by the decrease in export quantity, with export prices remaining relatively unchanged. Moreover, digital trade barriers decrease Chinese exports not only by depressing the exports of surviving products but also by reducing the exporting possibility of new entering products and increasing the risk of products' exiting. The heterogeneity analyses show that a favorable institutional environment helps alleviate the negative effects and that exports of high‐tech products are less sensitive to digital trade barriers.
Based on the trade data of digitizable products exported by China to the 65 ‘Belt and Road’ countries from 1998 to 2018, this study adopts the extended trade gravity model to analyze the impact of ICT on the country's exports of these products. The empirical results show that ICT has a significant and positive effect on the development of trade of digitizable products and it also promotes China's exports by lowering trade costs and accelerating innovation. The paper provides new evidence on information and technology's impact and influential mechanisms with regard to new trade patterns.
The article is devoted to m-commerce and mobile payments as new and actively developing types of economic activity. Mobile commerce is inherently international. The volume of trade through various Internet services is growing rapidly every year. This process is widespread among companies in economically developed countries. Mobile trading allows you to ensure high efficiency of the enterprise; it benefits both sellers and buyers around the world
International trade is subject to information incompleteness. Firms must therefore engage in a costly search process to find business partners. Online platforms can reduce these search costs and thereby favor firms’ overall exports. We examine whether this is actually the case and the underlying mechanisms thereof. In so doing, we combine detailed information on firms’ participation in a free, purely informational online platform and customs data covering the entire universe of a developing country's export transactions over a long time period. We apply various estimation strategies on these data, including specifically the use of how many visits firms received to their profiles as a source of identifying variation. Consistent with its interpretation as a search cost-reducing mechanism, our estimates suggest that joining the platform resulted in increased firms’ total exports, particularly of those firms that are small or had no digital presence, of differentiated products, and to less familiar destinations.
We examine how the adoption of information communication technology affects bilateral trade. The context is a public program in Norway that rolled out broadband access points leading to plausibly exogenous variation in the availability and adoption of broadband by firms. We find that broadband makes trade patterns more sensitive to distance and economic size. These results are consistent with a model of trade with variable elasticity of demand. The model predicts that adoption of a technology that lowers information frictions enlarges the choice set of exporters and importers. This makes demand more elastic with respect to trade costs and thus distance. (JEL D83, F14, L86, O33)
Employing Chinese customs data and the Peking University Digital Financial Inclusion Index of China, this paper studies the impact of China's digital finance development on the upgrading of export at the city level and further explores the heterogeneity across cities and the mechanisms through which digital finance influences export upgrading. Benchmark results suggest that digital inclusive finance can significantly promote the upgrading of export. The heterogeneity analysis shows that cities with a smaller size, lower wage, higher human capital level, and better location advantage experience greater facilitating effects of digital inclusive finance on promoting export upgrading. It suggests that, compared with ‘icing on the cake’, the digital inclusive finance plays a better role in ‘offering fuel in snowy weather’, whereas full exertion of the inclusiveness of digital finance requires higher human capital and location advantage. Further mechanism analysis shows that innovation effect and market effect are the main channels where digital inclusive finance promotes the upgrading of a city’s export.
With the wide-spread adoption of the Internet, websites that host job boards and CV banks have become important intermediaries in the labor market. Despite their popularity and conflicting evidence about their effectiveness, we know relatively little about the market for these websites and about their decision making. We address this void in two ways. First, we document how the market for employment websites evolved in the U.S. Second, we explore how a rapid expansion of Craigslist into local markets in the U.S. impacted market concentration and decision-making of competing websites.
Although economists have long been aware of Jensen's inequality, many econometric applications have neglected an important implication of it: under heteroskedasticity, the parameters of log-linearized models estimated by OLS lead to biased estimates of the true elasticities. We explain why this problem arises and propose an appropriate estimator. Our criticism of conventional practices and the proposed solution extend to a broad range of applications where log-linearized equations are estimated. We develop the argument using one particular illustration, the gravity equation for trade. We find significant differences between estimates obtained with the proposed estimator and those obtained with the traditional method.
The ‘distance effect' measuring the elasticity of trade flows to distance has been found to be rising since the early 1970s in a host of studies based on the gravity model, leading observers to call it the ‘distance puzzle'. However, this puzzle is regularly challenged by new developments in the specification of the gravity equation or in its estimations. We propose an original survey on the existing methods used to quantify the distance puzzle – basically the computation of an average distance of trade, a meta‐analysis on existing gravity papers and the implementation of recent econometric developments, all on a well‐specified gravity equation both in cross‐section and panel data. We apply all these methods to a unique large database (124 countries from 1970 to 2006). It appears that if all these new developments can change the amplitude of the increase in the trade elasticity to distance, none solve the distance puzzle. We confirm the existence of this puzzle and identify that it only applies to low‐income countries which exhibit a significant rising distance effect on their trade of around 18% between 1970 and 2006 while the distance ‘puzzle' for trade within richer countries disappears.
This paper shows that reduced heterogeneity of exporter-specific goods can provide a direct explanation of the distance puzzle. Using COMTRADE 4-digit bilateral trade data we find that the elasticity of trade to distance has increased by 8% from 1962 to 2009. Theoretical foundations of the gravity equation indicate that the distance coefficient is the product of the elasticity of trade costs to distance and a measure of heterogeneity, e.g. the substitution elasticity between exporter-specific goods in the Armington framework. This parameter has increased by at least 12-29% from 1962 to 2009. The evolution of the distance coefficient is thus compatible with a 4-16% reduction in the elasticity of trade costs to distance.
Micro-level data have had a profound infl uence on research in international trade over
the last ten years. In many regards, this research agenda has been very successful. New
stylized facts have been uncovered and new trade models have been developed to explain
these facts. In this paper we investigate to which extent answers to new micro-level
questions have affected answers to an old and central question in the field: How large are
the welfare gains from trade? A crude summary of our results is: So far, not much.
This paper summarizes the methodology of the Worldwide Governance Indicators (WGI) project, and related analytical issues. The WGI cover over 200 countries and territories, measuring six dimensions of governance starting in 1996: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. The aggregate indicators are based on several hundred individual underlying variables, taken from a wide variety of existing data sources. The data reflect the views on governance of survey respondents and public, private, and NGO sector experts worldwide. The WGI also explicitly report margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. Even after taking these margins of error into account, the WGI permit meaningful cross-country and over-time comparisons.
The “distance effect” measuring the elasticity of trade flows to distance has been to be rising since the early 1970s in a host of studies based on the gravity model, leading observers to call it the “distance puzzle”. We review the evidence and explanations. Using an extensive data set of 124 countries over the period 1970-2005, we confirm the existence of this puzzle and identify that it only applies to poor countries (the bottom third in per capita income terms in our sample—i.e. the low-income countries according to the World Bank classification, 2006). We show that this group has intensified trade with closer partners and have chosen new partners that are closer than existing partners, leading to a regionalization of their trade at both extensive and intensive margins (regionalization of trade is absent for the other countries). Combining several methods on cross-section and panel estimates of the gravity equation, we estimate that low-income countries exhibit a significant rising distance effect on their trade around 18% between 1970 and 2006 while there is no more distance “puzzle” for trade within richer countries (the top third in per capita income terms in our sample). We dispose of several previous explanations of the puzzle, and note that this regionalization could well be a reflection of both increased integration of this group of countries in the world economy or a greater marginalization.
We develop a simple model of international trade with heterogeneous firms that is consistent with a number of stylized features of the data. In particular, the model predicts positive as well as zero trade flows across pairs of countries, and it allows the number of exporting firms to vary across destination countries. As a result, the impact of trade frictions on trade flows can be decomposed into the intensive and extensive margins, where the former refers to the trade volume per exporter and the latter refers to the number of exporters. This model yields a generalized gravity equation that accounts for the self-selection of firms into export markets and their impact on trade volumes. We then develop a two-stage estimation procedure that uses an equation for selection into trade partners in the first stage and a trade flow equation in the second. We implement this procedure parametrically, semiparametrically, and nonparametrically, showing that in all three cases the estimated effects of trade frictions are similar. Importantly, our method provides estimates of the intensive and extensive margins of trade. We show that traditional estimates are biased and that most of the bias is due not to selection but rather due to the omission of the extensive margin. Moreover, the effect of the number of exporting firms varies across country pairs according to their characteristics. This variation is large and particularly so for trade between developed and less developed countries and between pairs of less developed countries. (c) 2008 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology..
We analyze geographic patterns of trade between individuals using transactions data from eBay and MercadoLibre, two large online auction sites. We find that distance continues to be an important deterrent to trade between geographically separated buyers and sellers, though to a lesser extent than has been observed in studies of non-Internet commerce between business counterparties. We also find a strong "home bias" for trading with counterparties located in the same city. Further analyses suggest that location-specific goods such as opera tickets, cultural factors, and the possibility of direct contract enforcement in case of breach may be the main reasons behind the same-city bias. (JEL D44, F11, R12)
How much do cultural biases affect economic exchange? We answer this question by using data on bilateral trust between European
countries. We document that this trust is affected not only by the characteristics of the country being trusted, but also
by cultural aspects of the match between trusting country and trusted country, such as their history of conflicts and their
religious, genetic, and somatic similarities. We then find that lower bilateral trust leads to less trade between two countries,
less portfolio investment, and less direct investment, even after controlling for the characteristics of the two countries.
This effect is stronger for goods that are more trust intensive. Our results suggest that perceptions rooted in culture are
important (and generally omitted) determinants of economic exchange.
Gravity equations have been widely used to infer trade flow effects of various institutional arrangements. We show that estimated gravity equations do not have a theoretical foundation. This implies both that estimation suffers from omitted variables bias and that comparative statics analysis is unfounded. We develop a method that (i) consistently and efficiently estimates a theoretical gravity equation and (ii) correctly calculates the comparative statics of trade frictions. We apply the method to solve the famous McCallum border puzzle. Applying our method, we find that national borders reduce trade between industrialized countries by moderate amounts of 20-50 percent.
This paper develops a method to measure difficulties in market access over a large set of industries and countries (both developing and developed), during the period 1980–2006. We use a micro-founded heterogeneous-consumers model to estimate the impact of national borders on global and regional trade flows. Results show that difficulties faced by developing countries' exporters in accessing developed markets are 50% higher than those faced by Northern exporters. These difficulties have however experienced a noticeable fall since 1980 in all industries. It is twenty three times easier to enter Northern and Southern markets for a Southern country exporter in 2006 than in 1980. Expressed in tariff-equivalent, the level of protection implied when crossing a border fell from 180% to 89% for this same sample. While tariffs still have an influence on trade patterns, they do not seem to explain an important part of the border effect. Last, our theory-based measure offers a renewal of the assessment of the impact of regional trading arrangements. The EU, NAFTA, ASEAN and MERCOSUR agreements all tend to reduce the estimated degree of market fragmentation within those zones, with the expected ranking between their respective trade impact.
Since Stigler's (1961) seminal paper, models of costly search have been at the heart of many economic models trying to explain imperfectly competitive behavior in product and labor markets. The theoretical literature typically models consumer search in two ways. Following Stigler's original model, a strand of literature assumes fixed sample size search behavior, where consumers sample a fixed number of stores and choose to buy the lowest priced alternative.1 A much larger strand of the literature, starting with McCall (1970) and Mortensen (1970), points out that consumers cannot commit to a fixed sample size search strategy in instances where the expected marginal benefit of an extra search exceeds the marginal cost. Thus, this literature argues that a sequential search model provides a better description of actual consumer search.
It is costly to learn about market conditions elsewhere, especially in developing countries. This paper examines how such information frictions affect trade. Using data on regional agricultural trade in the Philippines, I first document a number of observed patterns in trade flows and prices that suggest the presence of information frictions. I then incorporate information frictions into a perfect competition trade model by embedding a process whereby heterogeneous producers engage in a costly sequential search process to determine where to sell their produce. I show that introducing information frictions reconciles the theory with the observed patterns in the data. Structural estimation of the model finds that information frictions are quantitatively important: roughly half the observed regional price dispersion is due to information frictions. Furthermore, incorporating information frictions improves the out-of-sample predictive power of the model.
With increasing sophistication, economists have been estimating gravity equations for five decades. Robust evidence shows that borders and distance impede trade by much more than tariffs or transports costs can explain. We therefore advocate investigation of other sources of resistance, despite the greater difficult involved in measuring and modelling them. From our selective review of recent findings, a unifying explanation emerges. A legacy of historical isolation and conflict forged a world economy in which neither tastes nor information are homogeneously distributed. Cultural difference and inadequate information manifest themselves most strongly at national borders and over distance. Qu'est-ce qui nous sépare? Sources de résistance à la mondialisation. Les économistes ont estimé avec de plus en plus de sophistication des équations de gravité depuis quelques 50 ans. Des résultats robustes montrent que frontières et distances sont des freins au commerce beaucoup plus importants que ce qui peut être attribué aux droits de douane et aux coûts de transport. Nous suggérons donc que l'on étudie d' autres sources de résistance malgré les plus grandes difficultés de mesure et de modélisation qu'elles engendrent. A partir d'une revue sélective de la littérature, une explication unifiée semble s'imposer. Un héritage historique d'isolement et de conflit a forgé une économie mondiale dans laquelle ni les goûts ni l'information ne sont répartis de façon homogène. Les différences culturelles et les coûts informationnels se manifestent le plus fortement aux frontières et par la distance.
I propose a simple solution to the distance puzzle in international trade. Contrary to existing estimates of persistent or increasing distance effects on trade, I offer robust evidence that the impact of distance on trade has fallen steadily over time.
This paper introduces the Exporter Dynamics Database. The database includes exporter characteristics and measures of exporter growth based on firm-level customs information from 38 developing and seven developed countries, primarily for the period between 2003 and 2010. The measures are available at different levels of aggregation, including: a) country-year, b) country-year-product, and c) country-year-destination. Several new stylized facts about exporter behavior across countries emerge from the database. (i) Larger or more developed economies have more exporters, larger and more diversified exporters, and lower entry and exit rates than smaller or developing economies. (ii) In the short run, expansions along the intensive margin (exporter size) contribute more to export growth than expansions along the extensive margin (number of exporters). (iii) Exit rates are highly correlated with entry rates and both are negatively correlated with survival rates, average exporter size, and diversification. (iv) The number of exporters and the entry and exit rates in a country-product group are partially driven by country and product-group effects; however, the average size of exporters in a country-product group is not. Although the first three facts can be explained by models incorporating firm heterogeneity and uncertainty, the fourth fact is more difficult to explain with existing models. Several findings are confirmed in this database, including the importance of large multi-product firms. This database can be a valuable tool to improve the understanding of the micro-foundations of export growth, by providing new insights about exporter characteristics and dynamics.
This chapter focuses on the estimation and interpretation of gravity equations for bilateral trade. This necessarily involves a careful consideration of the theoretical underpinnings since it has become clear that naive approaches to estimation lead to biased and frequently misinterpreted results. There are now several theory-consistent estimation methods and we argue against sole reliance on any one method and instead advocate a toolkit approach. One estimator may be preferred for certain types of data or research questions but more often the methods should be used in concert to establish robustness. In recent years, estimation has become just a first step before a deeper analysis of the implications of the results, notably in terms of welfare. We try to facilitatediffusion of best-practice methods by illustrating their application in a step-by-step cookbook mode of exposition.
David Ricardo (1817) provided a mathematical example showing that countries could gain from trade by exploiting innate differences in their ability to make different goods. In the basic Ricardian example, two countries do better by specializing in different goods and exchanging them for each other, even when one country is better at making both. This example typically gets presented in the first or second chapter of a text on international trade, and sometimes appears even in a principles text. But having served its pedagogical purpose, the model is rarely heard from again. The Ricardian model became something like a family heirloom, brought down from the attic to show a new generation of students, and then put back. Nearly two centuries later, however, the Ricardian framework has experienced a revival. Much work in international trade during the last decade has returned to the assumption that countries gain from trade because they have access to different technologies. These technologies may be generally available to producers in a country, as in the Ricardian model of trade, our topic here, or exclusive to individual firms. This line of thought has brought Ricardo's theory of comparative advantage back to center stage. Our goal is to make this new old trade theory accessible and to put it to work on some current issues in the international economy.
We estimate the sensitivity of Internet retail purchasing to sales taxes using data from the eBay marketplace. Our first approach exploits the fact that seller locations are revealed only after buyers have expressed interest in an item by clicking on its listing. We use millions of location "surprises" to estimate price elasticities with respect to the effective sales tax. We then use aggregated data to estimate cross-state substitution parameters, and substitution between offline and online purchases, relying on the variation in state and local sales taxes, and on changes in these rates over time. We find substantial sensitivity to sales taxes. Using our item-level approach, we find a price elasticity of around -2 for interested buyers. Using our aggregate approach, we find that a one percentage point increase in a state's sales tax increases online purchases by state residents by just under two percent, but decreases their online purchases from home-state retailers by 3-4 percent.Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.
Since George A. Akerlof (1970), economists have understood the adverse selection problem that information asymmetries can create in used goods mar-kets. The remarkable growth in online used goods auctions thus poses a puzzle. Part of the solution is that sellers voluntarily disclose their private information on the auction webpage. This defines a precise contract — to deliver the car shown for the closing price — which helps protect the buyer from adverse se-lection. I test this theory using data from eBay Motors, finding that online disclosures are important price determinants; and that disclosure costs impact both the level of disclosure and prices.
This article examines the effect of the advent and diffusion of e-commerce on supply-side industry structure. We specify a general industry model involving consumers with differing search costs buying products from heterogeneous producers. We interpret e-commerce as a reduction in consumers' search costs. We show how it reallocates market shares from high-cost to low-cost producers. We test the model using US data for three industries: travel agencies, bookstores and new car dealers. Each industry exhibits the market share shifts predicted by the model but the mechanisms vary, ranging from aggregate factors in the travel industry to local-market factors in the other two industries. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009.
This paper provides evidence supporting Grossman's (Comments on Alan V. Deardorff, Determinants of bilateral trade: Does gravity work in a neoclassical world?. In: Jeffrey A. Frankel (Ed.), The regionalization of the world economy. Chicago: University of Chicago for NBER; 1996) claim that not only transport costs but also unfamiliarity can explain the negative correlation between geographic distances and bilateral trade volumes. A gravity model that controls for as many natural causes of trade as possible reveals that countries high in uncertainty-aversion (based on Hofstede's survey) export disproportionately less to distant countries (with which they are presumably less familiar). More important, this result is mainly driven by differentiated products, not by products with international organized exchanges or with reference prices. For transport costs alone to explain such a trade pattern, one would have to assume that distance-related ad valorem transport costs are higher when a trade route originates from a high uncertainty-aversion country, which is unlikely. This trade pattern is easy to explain, however, if one accepts that geographic distance is a proxy for unfamiliarity and that exporters in high uncertainty-aversion countries are more sensitive to informational ambiguity. A further result is that high uncertainty-aversion countries trade less and thus grow poorer in the long run, which suggests that cultural factors are as important as geographic ones in determining trade openness and prosperity.
Using disaggregated bilateral trade data, we find that the elasticity of trade to distance increased (in absolute value) by about 10% since 1985. To explore the reasons for this shift, we decompose the change in the distance elasticity of trade into the part due to a shift in the composition of trade among industries and the part due to a change in the distance sensitivity within industries. We find that adjustment in the composition of trade had little effect, but for 40% of industries distance became more important, with nearly all of the remaining industries showing no significant change. We explore alternative hypotheses as to why the elasticity of trade to distance increased in some industries. We find that homogeneous goods, bulky goods, and high tariff goods became significantly more distance sensitive. In contrast, the evidence implies that changes in tariffs and freight costs have reduced the importance of distance on trade. We conclude that the increase in the importance of distance over time is related to the substitutability of goods and the level of trade costs, but not to changes in tariffs or freight costs.
We show that gravity holds in the case of digital goods consumed over the Internet that have no trading costs. Therefore trade costs cannot fully account for the effects of distance on trade. In particular, we show that Americans are more likely to visit websites from nearby countries, even controlling for language, income, immigrant stock, etc. Furthermore, we show that this effect only holds for taste-dependent digital products, such as music, games, and pornography. For these, a 1% increase in physical distance reduces website visits by 3.25%. For non-taste-dependent products, such as software, distance has no statistical effect.
I propose a network/search view of international trade in differentiated products. I present evidence that supports the view that proximity and common language/colonial ties are more important for differentiated products than for products traded on organized exchanges in matching international buyers and sellers, and that search barriers to trade are higher for differentiated than for homogeneous products. I also discuss alternative explanations for the findings.
We construct a panel of eBay seller histories and examine the importance of eBay's reputation mechanism. We find that, when a seller first receives negative feedback, his weekly sales rate drops from a positive 5% to a negative 8%; subsequent negative feedback ratings arrive 25% more rapidly than the first one and don't have nearly as much impact as the first one. We also find that a seller is more likely to exit the lower his reputation is; and that, just before exiting, sellers receive more negative feedback than their lifetime average. Copyright 2010 The Authors. Journal compilation 2010 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.
Standard real business cycle models must rely on total factor productivity (TFP) shocks to explain the observed comovement of consumption, investment, and hours worked. This paper shows that a neoclassical model consistent with observed heterogeneity in labor supply and consumption can generate comovement in the absence of TFP shocks. Intertemporal substitution of goods and leisure induces comovement over the business cycle through heterogeneity in the consumption behavior of employed and unemployed workers. This result owes to two model features introduced to capture important characteristics of U.S. labor market data. First, individual consumption is affected by the number of hours worked: Employed agents consume more on average than the unemployed do. Second, changes in the employment rate, a central factor explaining variation in total hours, affect aggregate consumption. Demand shocks--such as shifts in the marginal efficiency of investment, as well as government spending shocks and news shocks--are shown to generate economic fluctuations consistent with observed business cycles.
Using a large data set on consumers' web browsing and purchasing behavior we contrast various classical search models. We find that the benchmark model of sequential search with a known distributions of prices can be rejected based on the recall patterns we observe in the data. Moreover, we show that even if consumers are initially unaware of the price distribution and have to learn the price distribution, observed search behavior for given consumers over time is more consistent with non-sequential search than sequential search with learning. Our findings suggest non-sequential search provides a more accurate description of observed consumer search behavior. We then utilize the non-sequential search model to estimate the price elasticities and markups of online book retailers.
We construct a panel of eBay seller histories and examine the importance of eBay s reputation mechanism. We find that, when a seller first receives negative feedback, his weekly sales rate drops from a positive7% to a negative 7%; subsequent negative feedback ratings arrive 25% more rapidly than the first one and don t have nearly as muchimpact as the first one. We also find that a seller is more likely to exit the lower his reputation is; and that, just before exiting, sellers receive more negative feedback than their lifetime average.We consider a series of theoretical models and measure them against these empirical results. Regardless of which theoretical model best explains the data, an important conclusion of our paper is that eBay sreputation system gives way to noticeable strategic responses from both buyers and sellers.
One of the best-established empirical results in international economics is that bilateral trade decreases with distance. Although well known, this result has not been systematically analyzed before. We examine 1,467 distance effects estimated in 103 papers. Information collected on each estimate allows us to test hypotheses about the causes of variation in the estimates. Our most interesting finding is that the estimated negative impact of distance on trade rose around the middle of the century and has remained persistently high since then. This result holds even after controlling for many important differences in samples and methods. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Corruption and imperfect contract enforcement dramatically reduce international trade. This paper estimates the reduction using a structural model of import demand in which insecurity acts as a hidden tax on trade. We find that inadequate institutions constrain trade as much as tariffs do. We also find that omission of indices of institutional quality biases the estimates of typical gravity models, obscuring a negative relationship between per capita income and the share of total expenditure devoted to traded goods. Finally, we argue that cross-country variation in the effectiveness of institutions and the consequent variation in the prices of traded goods offer a simple explanation for the stylized fact that high-income, capital-abundant countries trade disproportionately with each other. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technolog
We examine the effects of different forms of feedback information on the performance of markets that suffer from moral hazard problems due to sequential exchange. As orthodox theory would predict, we find that providing buyers with information about sellers' trading history boosts market performance. More surprisingly, this beneficial effect of incentives for reputation building is considerably enhanced if sellers, too, can observe other sellers' trading history. This suggests that two-sided market transparency is an important ingredient for the design of well-functioning markets that are prone to moral hazard. (JEL: C72, C91, L14) Copyright (c) 2005 The European Economic Association.
This paper develops a method to measure difficulties in market access over a large set of industries and countries (both developing and developed), during the period 1980–2006. We use a micro-founded heterogeneous-consumers model to estimate the impact of national borders on global and regional trade flows. Results show that difficulties faced by developing countries' exporters in accessing developed markets are 50% higher than those faced by Northern exporters. These difficulties have however experienced a noticeable fall since 1980 in all industries. It is twenty three times easier to enter Northern and Southern markets for a Southern country exporter in 2006 than in 1980. Expressed in tariff-equivalent, the level of protection implied when crossing a border fell from 180% to 89% for this same sample. While tariffs still have an influence on trade patterns, they do not seem to explain an important part of the border effect. Last, our theory-based measure offers a renewal of the assessment of the impact of regional trading arrangements. The EU, NAFTA, ASEAN and MERCOSUR agreements all tend to reduce the estimated degree of market fragmentation within those zones, with the expected ranking between their respective trade impact.
Since the seminal work of Krugman (1979), product variety has played a central role in models of trade and growth. In spite of the general use of love-of-variety models, there has been no systematic study of how the import of new varieties has contributed to national welfare gains in the United States. In this paper we show that the unmeasured growth in product variety from US imports has been an important source of gains from trade over the last three decades (1972-2001). Using extremely disaggregated data, we show that the number of imported product varieties has increased by a factor of four. We also estimate the elasticities of substitution for each available category at the same level of aggregation, and describe their behavior across time and SITC-5 industries. Using these estimates we develop an exact price index and find that the upward bias in the conventional import price index is approximately 1.2 percent per year. The magnitude of this bias suggests that the welfare gains from variety growth in imports alone are 2.8 percent of GDP
The rapid rise in sales over the Internet and the fact that most Internet buyers pay no sales tax has ignited a considerable
debate over taxes and the Internet. This paper uses new data on the purchase decisions of approximately 25,000 online users
to examine the effect of local sales taxes on Internet commerce. The results suggest that, controlling for observable characteristics,
people living in high sales taxes locations are significantly more likely to buy online. The results are quite robust and
cannot be explained by unobserved technological sophistication, shopping costs, or other alternative explanations. The magnitudes
in the paper suggest that applying existing sales taxes to Internet commerce might reduce the number of online buyers by up
to 24 percent.
The great trade collapse
- Richard Baldwin
Baldwin, Richard (2009). The great trade collapse. VoxEU.org Publication.
Sales taxes and internet commerce. NBER Working paper 18018
- Liran Einav
- Dan Knoepfle
- Jonathan Levin
- Neel Sundaresan
Einav, Liran, Dan Knoepfle, Jonathan Levin and Neel Sundaresan (2012). Sales taxes and
internet commerce. NBER Working paper 18018, National Bureau of Economic Research,
Boston.
US cross-channel retail forecast
- Forrester-Research
Forrester Research Inc. (2013). US Cross-Channel Retail Forecast, 2012 To 2017. October
29.
What separates us? Sources of resistance to globalization
- G M Grossman
- Thierry Keith
- Mayer
Grossman, G.M. (1998) Comment on Determinants of Bilateral Trade: Does Gravity Work
in a Neoclassical World? Chicago: University of Chicago Press
Head, Keith and Thierry Mayer (2013). What separates us? Sources of resistance to
globalization. Canadian Journal of Economics, Canadian Economics Association, Canadian
Economics Association, vol. 46(4), pages 1196-1231, November.
Inattentive Importers, Working Papers
- Kunal Dasgupta
- Jordi Mondria
Dasgupta, Kunal and Mondria, Jordi, (2014), Inattentive Importers, Working Papers,
University of Toronto, Department of Economics.
The great trade collapse: causes, consequences and prospects
- R E Baldwin
The gravity equation in international trade: an explanation
- T Chaney
The puzzling persistence of the distance effect on bilateral trade
- Disdier
Cultural biases in economic exchange?
- Guiso
A flat world, a level playing field, a small world after all, or none of the above? A review of Thomas Friedman's the world is flat
- Leamer