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Electronic Commerce and Developing Countries: a Computable General Equilibrium Analysis


  • Juan Pizarro Ríos

    (United Nations Conference on Trade and Development (UNCTAD))


It is widely recognized that electronic commerce reduces transaction costs, increases efficiency and produces important changes in management and production process of businesses. At the macroeconomic level, there is also a growing trend among economists to agree that Business-to-Business electronic commerce can have a positive impact on productivity and growth of developed countries. This paper focuses on the quantitative analysis of the impact of electronic commerce on the global economy, when developing economies fall behind technologically and when they catch-up with developed countries. The analysis is centered on cost savings and assumes that electronic commerce can reduce costs of services, particularly, in retail and wholesale trade, transport, financial and business services. Experiments are based on a thirteensector and six-region aggregation framework, using a computable general equilibrium model, the GTAP model. Cost savings in services are simulated through a productivity growth scenario. Except for waterway transport services, the results, in general, reveal that when developing countries fall behind technologically, the income gap between developing and developed countries will increase. Developing countries will lose welfare, deteriorate in terms of trade and reduce wages. The results also point out that convergence in productivity in services offers the possibility for developing countries to increase their external competitiveness and increase output, wages and welfare.

Suggested Citation

  • Juan Pizarro Ríos, 2002. "Electronic Commerce and Developing Countries: a Computable General Equilibrium Analysis," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, issue 49, pages 37-62.
  • Handle: RePEc:pcp:pucrev:y:2002:i:49:p:37-62

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    1. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    2. Granger, C. W. J. & Newbold, Paul, 1986. "Forecasting Economic Time Series," Elsevier Monographs, Elsevier, edition 2, number 9780122951831 edited by Shell, Karl.
    3. Adolfo Figueroa, 1991. "Transformación en la Agricultura de América Latina: Capitalismo y Campesinado," Capítulos de Libros PUCP / Chapters of PUCP books,in: La agricultura latinoamericana: crisis, transformaciones y perspectivas, edition 1 Fondo Editorial - Pontificia Universidad Católica del Perú.
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