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The internet and Chinese exports in the pre-ali baba era

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  • Fernandes, Ana M.
  • Mattoo, Aaditya
  • Nguyen, Huy
  • Schiffbauer, Marc

Abstract

The dramatic expansion of internet access in China allows us to analyze the impact of the internet on firm performance. Combining firm-level production data with province-level information on internet penetration, we examine how the internet rollout across Chinese provinces in 1999–2007 influenced firm export behavior. We show that the internet rollout boosted firm manufacturing exports, even before the rise of major e-commerce platforms. We take a closer look at why, addressing 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? We find that the internet did not just enhance trade but improved overall firm performance; results are consistent with improvements in communication with both buyers and input suppliers; 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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  • Fernandes, Ana M. & Mattoo, Aaditya & Nguyen, Huy & Schiffbauer, Marc, 2019. "The internet and Chinese exports in the pre-ali baba era," Journal of Development Economics, Elsevier, vol. 138(C), pages 57-76.
  • Handle: RePEc:eee:deveco:v:138:y:2019:i:c:p:57-76
    DOI: 10.1016/j.jdeveco.2018.11.003
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    Cited by:

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    2. Bahia, Kalvin & Castells, Pau & Cruz, Genaro & Masaki, Takaaki & Pedrós, Xavier & Pfutze, Tobias & Rodriguez Castelan, Carlos & Winkler, Hernan, 2020. "The Welfare Effects of Mobile Broadband Internet: Evidence from Nigeria," IZA Discussion Papers 13219, Institute of Labor Economics (IZA).
    3. Zhiyuan Chen & Aksel Erbahar & Yuan Zi, 2019. "Made and Created in China: Super Processors and Two-way Heterogeneity," Tinbergen Institute Discussion Papers 19-080/VI, Tinbergen Institute.
    4. Masaki,Takaaki & Granguillhome Ochoa,Rogelio & Rodriguez Castelan,Carlos, 2020. "Broadband Internet and Household Welfare in Senegal," Policy Research Working Paper Series 9386, The World Bank.
    5. Rubínová, Stela & Sebti, Mehdi, 2021. "The WTO Global Trade Costs Index and its determinants," WTO Staff Working Papers ERSD-2021-6, World Trade Organization (WTO), Economic Research and Statistics Division.
    6. Vu, Khuong M & Asongu, Simplice, 2020. "Backwardness advantage and economic growth in the information age: A cross-country empirical study," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    7. Zhang, Jiaping & Cheng, Mingwang & Yu, Ning, 2020. "Internet Use and Lower Life Satisfaction: The Mediating Effect of Environmental Quality Perception," Ecological Economics, Elsevier, vol. 176(C).
    8. Abeliansky, Ana Lucia & Barbero, Javier & Rodriguez-Crespo, Ernesto, 2021. "ICTs quality and quantity and the margins of trade," Telecommunications Policy, Elsevier, vol. 45(1).
    9. Marjit, Sugata & Yang, Lei, 2020. "An Elementary Theorem on Gains from Virtual Trade," MPRA Paper 104088, University Library of Munich, Germany.
    10. Joël Cariolle & Michele Imbruno & Jaime de Melo, 2020. "Bilateral digital connectivity and firm participation in export markets," Working Papers hal-03182438, HAL.

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    More about this item

    Keywords

    F14; O33; Internet; Information and communication technology; Export growth; Firm-level data; China;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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