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

Wang (Avery. W), Yu, Wang, Yi, Lee, Soo Hee (2017) The Effect of Cross-Border E-Commerce on China’s International Trade: An Empirical Study Based on Transaction Cost Analysis. Sustainability, 9 (11). Article Number 2028. ISSN 2071-1050. (doi:10.3390/su9112028) (KAR id:64387)

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https://doi.org/10.3390/su9112028

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.

Item Type: Article
DOI/Identification number: 10.3390/su9112028
Uncontrolled keywords: cross-border e-commerce; international trade; transaction costs; comparative advantage; China
Divisions: Faculties > Social Sciences > Kent Business School
Depositing User: Soo Hee Lee
Date Deposited: 14 Nov 2017 13:03 UTC
Last Modified: 22 Sep 2020 16:02 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/64387 (The current URI for this page, for reference purposes)
Lee, Soo Hee: https://orcid.org/0000-0001-6053-6710
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