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Top1. Introduction
With the widespread application of digital technology, cross-border e-commerce (CBEC) has become a fast-growing and high-potential mode of international trade. According to the United Nations Conference on Trade and Development (UNCTAD), global e-commerce sales reached almost $26.7 trillion in 2019, corresponding to about 30% of the world’s GDP. China’s e-commerce sales are a third of the world’s and reached $2,604 billion in 20191. This study takes China as an example to investigate the implementation of CBEC policy, examine its impact on international trade, and provide policy implications for the development of global e-commerce.
The improvement in China’s internet infrastructure and the accelerated pace of upgraded consumption have led to a rapid growth of Chinese consumers’ demand for imported goods. As a result, China’s CBEC retail imports exceeded 100 billion RMB in 2020, and more than 10,000 firms were registered by the end of 20212. In 2016, the Chinese government implemented a related policy on CBEC retail imports and released a list of cross-border e-commerce retail goods. The policy has facilitated customs clearance; tax exemptions are eliminated; and the goods included in the list are subject to zero tariffs within a specific limit. This study aims to investigate the effects of CBEC policy on consumption behavior, focusing on China’s imports.
Based on the enactment of a CBEC policy and Chinese customs transaction trade data, this paper uses a difference-in-differences methodology to analyze the impact of CBEC on China’s import behavior. This study shows that CBEC policy significantly promotes China’s import value, price, and quantity. The promoting effects mainly come from the intensive and extensive margins of the expansion of import-sourcing countries rather than the enrichment of product variety. The effects are also determined by the level of development of digital technology in both import source countries and domestic importing regions. The implementation of CBEC policies also exhibits heterogeneous effects for different product categories, import source countries and domestic importing regions with different income levels.
The main contributions of this study are as follows: First, our study focuses on the consumption perspective and investigates the impact of CBEC on imports. Most studies have examined the impact of CBEC on exports from the supply perspective. It has been argued that CBEC has weakened the impact of geographical distance on international trade (Blum & Goldfarb, 2006; Du et al., 2022) and decreased export costs, such as the reduction of fixed costs, operational costs, and information costs of entering a new market through e-commerce platforms (Fink et al., 2005; Fan et al., 2018; Terzi, 2011). This gives small- and medium-sized firms more opportunities to participate in international trade (Ma et al., 2018, 2021; Zhang & Erturk, 2022) and increases the probability of export (Freund & Weinhold, 2004). However, importing consumers can access a wider variety of products through e-commerce platforms, overcome information asymmetry, and reduce search costs (Lendle et al., 2016). Translation features, user ratings, and platform feedback mechanisms significantly reduce information costs (Chen & Wu, 2021; Brynjolfsson et al., 2019; Tadelis, 2016). Additionally, search engines improve search efficiency and reduce search costs (Dinerstein et al., 2018; Jolivet & Turon, 2019; Goldfarb & Tucker, 2019). Our study is based on the semi-natural experiment of China’s CBEC policy, including the release of CBEC product lists and the related tax reduction implemented in 2016. Therefore, the paper examines its causal effects on imports and discusses the mechanisms regarding the import price, quantity, and intensive and extensive trade margins.