The Internet and Chinese Exports in the Pre-Alibaba Era
This paper uses the dramatic expansion of access to the Internet in China to analyze the impact of the Internet on firm performance. The paper combines firm-level production data with province-level information on Internet penetration to examine ho...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/303041511892965517/The-internet-and-Chinese-exports-in-the-pre-Alibaba-era http://hdl.handle.net/10986/28923 |
| Summary: | This paper uses the dramatic expansion
of access to the Internet in China to analyze the impact of
the Internet on firm performance. The paper combines
firm-level production data with province-level information
on Internet penetration to examine how the rollout of the
Internet across Chinese provinces between 1999 and 2007
influenced firms' export behavior. The econometric
strategy enables identifying the impact of the Internet on
firm performance in China. The paper shows that the rollout
of the Internet boosted manufacturing exports of firms in
China, even before the rise of major e-commerce platforms in
the country such as Alibaba. The paper takes a closer look
at why, focusing on three questions: what aspects of firm
performance were affected, what types of firm communication
were facilitated, and what dimensions of the new
communication medium were relevant? The paper finds that the
Internet not only enhanced trade, but also improved overall
firm performance. The results are consistent with
improvements in communication with buyers and input
suppliers. The benefits arose not just from better
communication, but from establishing a visible virtual
presence, and were enhanced by, but not contingent on,
access to broadband. |
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