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Cross-border shopping, E-commerce, and consumption tax revenues in Japan

Author

Listed:
  • Yoshimi Adachi

    (Konan University)

  • Hikaru Ogawa

    (The University of Tokyo)

Abstract

This study examines the impacts of cross-border shopping and e-commerce on local consumption tax revenues in Japanese municipalities. Employing fixed-effects regression models and instrumental variable (IV) techniques, the analysis finds that cross-border consumption is significantly associated with a reduction in municipal tax revenues: a 10% increase in cross-border consumption is linked to a 0.3–0.5% decrease in per capita tax revenue, while the overall impact of e-commerce appears to be limited. Of the two policy reforms aimed at mitigating the effects of cross-border consumption and e-commerce, the first appears to have had a measurable impact.

Suggested Citation

  • Yoshimi Adachi & Hikaru Ogawa, 2025. "Cross-border shopping, E-commerce, and consumption tax revenues in Japan," Asia-Pacific Journal of Regional Science, Springer, vol. 9(2), pages 605-627, June.
    • Handle: RePEc:spr:apjors:v:9:y:2025:i:2:d:10.1007_s41685-025-00380-y
    DOI: 10.1007/s41685-025-00380-y
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    More about this item

    Keywords

    Cross-border shopping; E-commerce; Local consumption tax; Digital economy;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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