IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v9y2017i11p2028-d117767.html
   My bibliography  Save this article

The Effect of Cross-Border E-Commerce on China’s International Trade: An Empirical Study Based on Transaction Cost Analysis

Author

Listed:
  • Yu Wang (Avery. W)

    (International Business School, Jinan University, Zhuhai 519070, China)

  • Yi Wang

    (International Business School, Jinan University, Zhuhai 519070, China)

  • Soo Hee Lee

    (Kent Business School, University of Kent, Canterbury, Kent CT2 7PE, UK)

Abstract

Reducing transaction costs by means of policy intervention could generate comparative advantages and contribute to the growth of international trade. Chinese government agencies have introduced a number of policies in support of rapidly growing cross-border e-commerce to promote China’s international trade. However, the previous literature has not empirically verified the precise effect of these policies on the growth of international trade while focusing on the impact of cross-border e-commerce on trade distance and consumer welfare. To address this gap, this paper investigates the impact of cross-border e-commerce on international trade in the context of China, mainly from the perspective of transaction cost economics in conjunction with the traditional comparative advantage model by analyzing information cost, negotiation cost, transportation cost, tariffs and middlemen cost separately. Firstly, the new theoretical model suggests that cross-border e-commerce may have a positive role in promoting international trade only when the negative impact caused by tariff cost and transportation cost is offset. Secondly, our result shows that cross-border e-commerce has a positive effect on the growth of China’s international trade in each year. However, the positive effect does not show incremental growth over time, possibly as a result of the weak implementation of favorable policies in trade, in addition to global trade shrinking.

Suggested Citation

  • Yu Wang (Avery. W) & Yi Wang & Soo Hee Lee, 2017. "The Effect of Cross-Border E-Commerce on China’s International Trade: An Empirical Study Based on Transaction Cost Analysis," Sustainability, MDPI, vol. 9(11), pages 1-13, November.
    • Handle: RePEc:gam:jsusta:v:9:y:2017:i:11:p:2028-:d:117767
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/9/11/2028/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/9/11/2028/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Erik Brynjolfsson & Yu (Jeffrey) Hu & Michael D. Smith, 2003. "Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers," Management Science, INFORMS, vol. 49(11), pages 1580-1596, November.
    2. Melisande Cardona & Bertin Martens, 2014. "Supply-side barriers to cross-border e-commerce in the EU Digital Single Market," JRC Working Papers on Digital Economy 2014-13, Joint Research Centre.
    3. Nestor Duch-Brown & Bertin Martens, 2014. "Consumer benefits from the EU Digital Single Market: evidence from household appliances markets," JRC Working Papers on Digital Economy 2014-03, Joint Research Centre (Seville site).
    4. Bertin Martens, 2013. "What does economic research tell us about cross-border e-commerce in the EU Digital Single Market?," JRC Working Papers on Digital Economy 2013-05, Joint Research Centre.
    5. Melisande Cardona & Nestor Duch-Brown & Bertin Martens, 2015. "Consumer perceptions of cross-border e-commerce in the EU," JRC Working Papers on Digital Economy 2015-06, Joint Research Centre.
    6. Frank A.G. den Butter & Robert H.J. Mosch, 2003. "Trade, Trust and Transaction Cost," Tinbergen Institute Discussion Papers 03-082/3, Tinbergen Institute.
    7. Nestor Duch-Brown & Bertin Martens, 2014. "Consumer benefits from the EU Digital Single Market: evidence from household appliances markets," JRC Working Papers on Digital Economy 2014-03, Joint Research Centre.
    8. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    9. John Antonakis & Samuel Bendahan & Philippe Jacquart & Rafael Lalive, 2010. "On making causal claims : A review and recommendations," Post-Print hal-02313119, HAL.
    10. Kim, T.Y. & Dekker, R. & Heij, C., 2016. "The value of express delivery services for cross-border e-commerce in European Union markets," Econometric Institute Research Papers EI2016-12, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    11. Gomez-Herrera, Estrella & Martens, Bertin & Turlea, Geomina, 2014. "The drivers and impediments for cross-border e-commerce in the EU," Information Economics and Policy, Elsevier, vol. 28(C), pages 83-96.
    12. Georgios Alaveras & Bertin Martens, 2015. "International Trade in Online Services," JRC Working Papers on Digital Economy 2015-08, Joint Research Centre.
    13. Lin Zhou & Xu Wang & Lin Ni & Yun Lin, 2016. "Location-Routing Problem with Simultaneous Home Delivery and Customer’s Pickup for City Distribution of Online Shopping Purchases," Sustainability, MDPI, vol. 8(8), pages 1-20, August.
    14. Nestor Duch-Brown & Bertin Martens, 2014. "Consumer benefits from the EU Digital Single Market: evidence from household appliances markets," JRC Working Papers on Digital Economy 2014-03, Joint Research Centre (Seville site).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Dongkun & Chen, Yufeng & Miao, Jiafeng, 2022. "Does ICT create a new driving force for manufacturing?—Evidence from Chinese manufacturing firms," Telecommunications Policy, Elsevier, vol. 46(1).
    2. Ying Song & Octavio Escobar & Unai Arzubiaga & Alfredo De Massis, 2022. "The digital transformation of a traditional market into an entrepreneurial ecosystem," Review of Managerial Science, Springer, vol. 16(1), pages 65-88, January.
    3. Yoonkyo Cho & Taehwan Kim & Jaewhak Roh, 2021. "An analysis of the effects of electronic commerce on the Korean economy using the CGE model," Electronic Commerce Research, Springer, vol. 21(3), pages 831-854, September.
    4. Yaqing Xu & Hong Gui & Jiang Zhang & Yihua Wei, 2019. "Supply Chain Analysis of Cross Border Importing E-Commerce Considering with Bonded Warehouse and Direct Mailing," Sustainability, MDPI, vol. 11(7), pages 1-12, March.
    5. Jian Mou & Gang Ren & Chunxiu Qin & Kerry Kurcz, 2019. "Understanding the topics of export cross-border e-commerce consumers feedback: an LDA approach," Electronic Commerce Research, Springer, vol. 19(4), pages 749-777, December.
    6. Xin Lin & RunZe Wu & Yong-Taek Lim & Jieping Han & Shih-Chih Chen, 2019. "Understanding the Sustainable Usage Intention of Mobile Payment Technology in Korea: Cross-Countries Comparison of Chinese and Korean Users," Sustainability, MDPI, vol. 11(19), pages 1-23, October.
    7. Jeoung Yul Lee & Young Soo Yang & Pervez N. Ghauri, 2023. "E-commerce Policy Environment, Digital Platform, and Internationalization of Chinese New Ventures: The Moderating Effects of Covid-19 Pandemic," Management International Review, Springer, vol. 63(1), pages 57-90, February.
    8. Artur Strzelecki, 2019. "Key Features of E-Tailer Shops in Adaptation to Cross-Border E-Commerce in the EU," Sustainability, MDPI, vol. 11(6), pages 1-13, March.
    9. Zhu, Wenlong & Mou, Jian & Benyoucef, Morad, 2019. "Exploring purchase intention in cross-border E-commerce: A three stage model," Journal of Retailing and Consumer Services, Elsevier, vol. 51(C), pages 320-330.
    10. Chikabwi, Douglas & Chikiwa, Rudo, 2021. "Would Customs Trade Facilitation Programs stimulate COMESA intra-export flows?," African Journal of Economic Review, African Journal of Economic Review, vol. 9(2), April.
    11. Yingyan Zhao & Yihong Zhou & Wu Deng, 2020. "Innovation Mode and Optimization Strategy of B2C E-Commerce Logistics Distribution under Big Data," Sustainability, MDPI, vol. 12(8), pages 1-13, April.
    12. Yumeng Miao & Rong Du & Jin Li & J. Christopher Westland, 2019. "A two-sided matching model in the context of B2B export cross-border e-commerce," Electronic Commerce Research, Springer, vol. 19(4), pages 841-861, December.
    13. Yugang He & Renhong Wu & Yong-Jae Choi, 2021. "International Logistics and Cross-Border E-Commerce Trade: Who Matters Whom?," Sustainability, MDPI, vol. 13(4), pages 1-20, February.
    14. Quoc Trung Pham & Xuan Phuc Tran & Sanjay Misra & Rytis Maskeliūnas & Robertas Damaševičius, 2018. "Relationship between Convenience, Perceived Value, and Repurchase Intention in Online Shopping in Vietnam," Sustainability, MDPI, vol. 10(1), pages 1-14, January.
    15. Meie Deng & Anlu Zhang, 2020. "Effect of Transaction Rules on Enterprise Transaction Costs Based on Williamson Transaction Cost Theory in Nanhai, China," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    16. Liang Xiao & Feipeng Guo & Fumao Yu & Shengnan Liu, 2019. "The Effects of Online Shopping Context Cues on Consumers’ Purchase Intention for Cross-Border E-Commerce Sustainability," Sustainability, MDPI, vol. 11(10), pages 1-24, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Melisande Cardona & Nestor Duch-Brown, 2016. "Delivery Costs and Cross-border e-Commerce in the EU Digital Single Market," JRC Working Papers on Digital Economy 2016-03, Joint Research Centre.
    2. Duch-Brown, Néstor & Grzybowski, Lukasz & Romahn, André & Verboven, Frank, 2017. "The impact of online sales on consumers and firms. Evidence from consumer electronics," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 30-62.
    3. Néstor Duch-Brown & Lukasz Grzybowski & André Romahn & Frank Verboven, 2023. "Evaluating the Impact of Online Market Integration—Evidence from the EU Portable PC Market," American Economic Journal: Microeconomics, American Economic Association, vol. 15(4), pages 268-305, November.
    4. ALAVERAS Georgios & DUCH BROWN Nestor & MARTENS Bertin, 2020. "Geo-blocking: Geo-blocking regulation: an assessment of its impact on the EU Digital Single Market," JRC Working Papers on Digital Economy 2020-02, Joint Research Centre.
    5. Bonnet, Céline & Etcheverry, Clara, 2021. "The Impact of Online Grocery Shopping on Retail Competition and Profit Sharing: an Empirical Evidence of the French Soft Drink Market," TSE Working Papers 21-1225, Toulouse School of Economics (TSE), revised Jan 2022.
    6. Melisande Cardona & Nestor Duch-Brown & Joseph Francois & Bertin Martens & Fan Yang, 2015. "The macro-economic impact of e-commerce in the EU Digital Single Market," JRC Working Papers on Digital Economy 2015-09, Joint Research Centre.
    7. Doris Ritzberger-Grünwald & Fabio Rumler, 2019. "Challenges for measuring inflation in a digital world from a monetary policy perspective," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q3/19, pages 42-53.
    8. Tamara Bińczak & Filip Kaczmarek & Jakub Rybacki, 2018. "Determinants of E-Commerce Turnover in Europe: Consumer Protection Matters," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 125-141.
    9. Artur Strzelecki, 2019. "Key Features of E-Tailer Shops in Adaptation to Cross-Border E-Commerce in the EU," Sustainability, MDPI, vol. 11(6), pages 1-13, March.
    10. Raghu Garud & Arun Kumaraswamy & Anna Roberts & Le Xu, 2022. "Liminal movement by digital platform‐based sharing economy ventures: The case of Uber Technologies," Strategic Management Journal, Wiley Blackwell, vol. 43(3), pages 447-475, March.
    11. Zi Hui Yin & Chang Hwan Choi, 2023. "The effects of China’s cross-border e-commerce on its exports: a comparative analysis of goods and services trade," Electronic Commerce Research, Springer, vol. 23(1), pages 443-474, March.
    12. Valarezo, Ángel & Pérez-Amaral, Teodosio & Garín-Muñoz, Teresa & Herguera García, Iñigo & López, Rafael, 2018. "Drivers and barriers to cross-border e-commerce: Evidence from Spanish individual behavior," Telecommunications Policy, Elsevier, vol. 42(6), pages 464-473.
    13. Ma, Shuzhong & Chai, Yuxi & Jia, Fu, 2022. "Mitigating transaction risk for cross-border e-commerce firms: A multiagent-based simulation study," International Business Review, Elsevier, vol. 31(4).
    14. Wang, Yebin & Gao, Huiyu & Wang, Haijun, 2024. "The digital silk road and trade growth – A quasi-natural experiment based on silk road E-commerce," Research in International Business and Finance, Elsevier, vol. 67(PB).
    15. Liang Xiao & Yanan Zhang, 2022. "An analysis on the policy evolution of cross-border ecommerce industry in China from the perspective of sustainability," Electronic Commerce Research, Springer, vol. 22(3), pages 875-899, September.
    16. Tisdell, Clem, 2014. "Information Technology's Impacts on Productivity, Welfare and Social Change: Second Version," Economic Theory, Applications and Issues Working Papers 195701, University of Queensland, School of Economics.
    17. Persson, Torsten & Tabellini, Guido, 2002. "Political economics and public finance," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 24, pages 1549-1659, Elsevier.
    18. Qiuyue Xia & Lu Li & Jie Dong & Bin Zhang, 2021. "Reduction Effect and Mechanism Analysis of Carbon Trading Policy on Carbon Emissions from Land Use," Sustainability, MDPI, vol. 13(17), pages 1-22, August.
    19. Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
    20. Usher, Dan, 2001. "Personal goods, efficiency and the law," European Journal of Political Economy, Elsevier, vol. 17(4), pages 673-703, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:9:y:2017:i:11:p:2028-:d:117767. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.