New driving force for China’s import growth: Assessing the role of cross‐border e‐commerce

• Published in: World economy 2021-12, Vol.44 (12), p.3674-3706
• Main Authors: Ma, Shuzhong, Guo, Xueyao, Zhang, Hongsheng
• Format: Article
• Language: English
• Subjects: Borders; Chinese economy; cross‐border e‐commerce; cultural distance; Developed countries; Economic analysis; Food; Imports; Robustness
• ISSN: 0378-5920; 1467-9701
• DOI: 10.1111/twec.13168

This paper investigates the role of cross‐border e‐commerce on China's import growth, using the promulgation of cross‐border e‐commerce‐related policies since 2012 as a quasi‐natural experiment and using the ‘Cross‐border E‐commerce Retail Import Commodity List’ to identify cross‐border e‐commerce industries. Our difference‐in‐difference results show that cross‐border e‐commerce has significantly boosted China's import growth. Dynamic effects show that while China's imports were low prior to 2012, cross‐border e‐commerce has increased China's imports significantly since 2012, verifying the validity of our baseline results. Placebo tests and a series of robustness checks further confirm the validity and robustness of the baseline results. Further analysis reveals that cross‐border e‐commerce has mainly promoted imports from developed countries, and primarily facilitated imports of clothing, food and daily necessities. Mechanism analysis shows that cross‐border e‐commerce not only stimulated both the intensive and extensive margins in import growth, but also reduced cultural distances and increased China's imports from countries with larger cultural distances substantially. However, geographical and institutional distances still matter and exhibit significantly negative effects on China's cross‐border e‐commerce imports.