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Great and Small Walls of China: Distance & Chinese E-Commerce

Author

Listed:
  • Liang Chen

    (Economics and Management School, Wuhan University, Luojia Hill, Wuhan, China, 430072)

  • Garrett Johnson

    (Simon Business School, University of Rochester, 3-206 Carol Simon Hall, Box 270100, Rochester, NY 14627)

  • Yao Luo

    (Department of Economics, University of Toronto, Max Gluskin House 322, 150 St. George Street, Toronto)

Abstract

Alibaba’s Taobao is China’s dominant C2C e-commerce platform. Relying on novel transaction level data from its electronics category, this paper examines the roles of distance as well as seller and buyer experience in Chinese e-commerce. Our estimate of a gravity model shows that the distance elasticity in our data is greater than US C2C e-commerce but smaller than that of South America. In addition, we document greater home bias in China than either of the US or South American Settings. Moreover, by estimating a “new-new” trade model using seller-level transaction data, this paper studies the link between seller experience and distance. Our results show that more experienced sellers tend to sell more and export their goods farther into the marketplace.

Suggested Citation

  • Liang Chen & Garrett Johnson & Yao Luo, 2015. "Great and Small Walls of China: Distance & Chinese E-Commerce," Working Papers 15-14, NET Institute.
    • Handle: RePEc:net:wpaper:1514
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    File URL: http://www.netinst.org/Chen_Johnson_Luo_15-14.pdf
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    References listed on IDEAS

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    Cited by:

    1. Fan, Jingting & Tang, Lixin & Zhu, Weiming & Zou, Ben, 2018. "The Alibaba effect: Spatial consumption inequality and the welfare gains from e-commerce," Journal of International Economics, Elsevier, vol. 114(C), pages 203-220.
    2. Yi Cai & Chunping Xia, 2018. "Interpretive Structural Analysis of Interrelationships among the Elements of Characteristic Agriculture Development in Chinese Rural Poverty Alleviation," Sustainability, MDPI, vol. 10(3), pages 1-19, March.

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    More about this item

    Keywords

    e-commmerce; China; gravity; distance; domestic trade; Internet marketing;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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