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The impact of e-commerce and R&D on firm-level production in China: Evidence from manufacturing sector

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  • Zhu, Facang
  • Shi, Qiule
  • Balezentis, Tomas
  • Zhang, Chonghui

Abstract

E-commerce provides opportunities to extend the market and plays a vital role in modern economy. However, its implementation often requires high-level technical infrastructure. This study regards both e-commerce and R&D as input factors and analyses their impact on firm output in the manufacturing sector of China. We find that e-commerce capital stocks and R&D capital stocks have a significant positive effect on the output growth, with R&D being more influential than e-commerce. Meanwhile, the inter-industry network externalities of e-commerce capital stocks have a significant positive impact on production growth. Still, the intra-industry network externalities of e-commerce capital stocks are significantly negative, which means online purchase and sales through e-commerce may induce product imitation (i.e., business stealing) and, thus, reduce output for certain companies in the industry. These findings suggest that R&D and favourable external innovation environment are the key factors for enhancing enterprise production levels.

Suggested Citation

  • Zhu, Facang & Shi, Qiule & Balezentis, Tomas & Zhang, Chonghui, 2023. "The impact of e-commerce and R&D on firm-level production in China: Evidence from manufacturing sector," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 101-110.
    • Handle: RePEc:eee:streco:v:65:y:2023:i:c:p:101-110
    DOI: 10.1016/j.strueco.2023.02.008
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    Keywords

    E-commerce; R&D; Capital; Production;
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