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Spatial Spillover Effects of Internet Development on Foreign Trade in China

Author

Listed:
  • Woraphon Yamaka

    (Center of Excellence in Econometrics, Chiang Mai University, Chiang Mai 50200, Thailand)

  • Rui Shi

    (Faculty of Economics, Chiang Mai University, Chiang Mai 50200, Thailand)

  • Paravee Maneejuk

    (Center of Excellence in Econometrics, Chiang Mai University, Chiang Mai 50200, Thailand)

  • Chihyi Chi

    (Department of Finance, National Chung Hsing University, Taichung 40227, Taiwan)

Abstract

This study analyzes the spatial spillover effects of internet development on China’s foreign trade using panel data of 31 provinces in China covering 2003–2016. First, the global Moran’s I is employed to check for spatial autocorrelation in internet development. The results demonstrate a positive correlation between the internet development of the local province and the neighboring provinces during the sample period. Then, we validate the accuracy and performance of the spatial Durbin model by comparing it with two other spatial models: spatial error and spatial autoregression. The Wald and Likelihood Ratio tests confirmed the superiority of the SDM model. According to the direct and indirect effects results obtained from SDM, internet development plays an essential role in promoting local foreign trade and generates a positive spatial spillover effect on the foreign trade of neighboring provinces. The key findings suggest that China should continuously strengthen its internet infrastructure and expand its internet popularity, especially in the tertiary sector, to enhance the advantage of the internet on international trade development.

Suggested Citation

  • Woraphon Yamaka & Rui Shi & Paravee Maneejuk & Chihyi Chi, 2023. "Spatial Spillover Effects of Internet Development on Foreign Trade in China," Sustainability, MDPI, vol. 15(5), pages 1-16, February.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:5:p:4213-:d:1081110
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    References listed on IDEAS

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