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eBay and the rise of the micro-multinationals
Abstract
Small international businesses are flourishing on the back of new technology, and becoming more multinational than much larger international corporations. Wandering through the airports of the world, weary travelers may well have noticed the regular HSBC ads forecasting the business trends of our changing world. Traditionally, exporting has been a complex and costly task. The libraries of business schools are well stocked with thick manuals and studies of foreign market entry, franchising, exporting and trade policies. The extra costs that exporting involves, from adaptive marketing to shipping insurance, have tended to make it an exclusive activity, reserved to a small, select clique of highly productive large corporations. Technologies such as those available to firms via the eBay platform are likely to be the sort of tools needed to help homemade lemonade brewers reach a global customer base. This is because online platforms enable individuals and firms to connect across cultural and national borders.
... A 2016 report by HSBC cites a 2013 study by Oxford Economics and SAP where a survey of 2100 SME in 21 countries found that the number of SME generating more than 40% of their revenue outside their home country was predicted to increase by 66% by 2016. The report also cites a Radius Global CFO Survey which found that 83% of SME said overseas expansion was a top priority [4]. ...
The digital paradigm has far-reaching implications for the global economy and for cross-border trade. Digital technologies are driving a new phase of global economic integration. With respect to international trade, it is generally acknowledged that the digital transformation changes what is traded, who trades and how trade is conducted. Data has emerged as a vital economic resource in the digital economy, leading to an exponential increase in global data exchange and a surge in cross-border data flows. The economic shift from tangible to intangible assets in a digital economy is resulting in the emergence of a digital paradigm for cross-border trade. This chapter is dedicated to illustrating the novel dimensions of cross-border economic activity in the era of digital globalisation. This chapter lays the groundwork for analysing the development of regulations for these new elements within a trade context and provides a background for analysing the nexus with data privacy regulations.
This paper explores the implications of recent developments in firm-based trade theory and empirics for trade policy and negotiations. While traditional trade theory focused on the country, and the new trade theory of the 1980s adopted the industry as the unit for analysis, the newest theory emphasizes the role of firms and firm heterogeneity in international trade. We describe insights from this reformulation of theory and the empirical literature that illuminates it. The realities of trade as now understood show the need for a new new trade policy. Evaluating trade at the level of the firm implies that overcoming firm-level fixed costs of trade and reducing uncertainty lead to increased trade along margins that generate the highest productivity, innovation and welfare gains. The traditional market access agenda ought now to be less important on the multilateral agenda than services, standards, trade facilitation, procurement and innovation policy. The analytical needs of a new new trade policy require new models and more access to firm-level data to formulate and evaluate the multifaceted impacts of trade policy.
In a recent article in the OECD Observer, Vézina and Melin describe how online platforms lower trade barriers and enable micro to small and medium-sized enterprises (SME) to build multinational operations. The contrast with traditional trade is stark, where exporting is normally confined to the largest corporations. Technology is reshaping the international trading landscape, and the changes are real and quantifiable. This is sharpening the role international trade can play in promoting sustainable development.
The European Union is determined that international trade should contribute to promoting sustainable development. The goal is a priority under the Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations.
In a recent article in the OECD Observer, Vézina and Melin describe how online platforms lower trade barriers and enable micro to small and medium-sized enterprises (SME) to build multinational operations. The contrast with traditional trade is stark, where exporting is normally confined to the largest corporations. Technology is reshaping the international trading landscape, and the changes are real and quantifiable. This is sharpening the role international trade can play in promoting sustainable development.
The European Union is determined that international trade should contribute to promoting sustainable development. The goal is a priority under the Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations.
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