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Sustainability 2017, 9(11), 2028; doi:10.3390/su9112028

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

1
International Business School, Jinan University, Zhuhai 519070, China
2
Kent Business School, University of Kent, Canterbury, Kent CT2 7PE, UK
*
Author to whom correspondence should be addressed.
Received: 19 September 2017 / Revised: 21 October 2017 / Accepted: 1 November 2017 / Published: 6 November 2017
View Full-Text   |   Download PDF [230 KB, uploaded 6 November 2017]

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. View Full-Text
Keywords: cross-border e-commerce; international trade; transaction costs; comparative advantage; China cross-border e-commerce; international trade; transaction costs; comparative advantage; China
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Wang (Avery. W), Y.; Wang, Y.; Lee, S.H. The Effect of Cross-Border E-Commerce on China’s International Trade: An Empirical Study Based on Transaction Cost Analysis. Sustainability 2017, 9, 2028.

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