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The Macro-economic Impact of Cross-border eCommerce in the EU

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Abstract

We use data on cross-border e-commerce between EU Member States to estimate the implied cross-border trade cost reduction when consumers move from offline to online consumption. We plug this trade cost estimate into a macro-sector multi-country CGE model to estimate the impact of online retailing on consumers as well as producers. We find that cross-border e-commerce increases real household consumption. However, the domestic spill-over effect squeezes price margins in the retail sector and has a negative output effect for that sector. The resulting retail sector efficiency gains have a positive effect on production in other sectors. The combined macro-economic effect of these transmission channels is generally positive for EU Member States, ranging between 0.07 and 0.25 per cent of GDP. As such, this paper adds an innovative macro-perspective to existing micro-economic estimates of the impact of e-commerce on consumer welfare.

Suggested Citation

  • Joseph Francois & Bertin Martens & Fan Yang, 2014. "The Macro-economic Impact of Cross-border eCommerce in the EU," JRC Working Papers on Digital Economy 2014-10, Joint Research Centre.
  • Handle: RePEc:ipt:decwpa:2014-10
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    File URL: https://joint-research-centre.ec.europa.eu/reports-and-technical-documentation/macro-economic-impact-cross-border-e-commerce-eu_en
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    Cited by:

    1. 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.

    More about this item

    Keywords

    e-commerce; online trade; cross-border trade; international trade; EU digital single market; CGE model; non-tariff barriers;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling

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