Empirical Analysis of the Impact of Digital Trade Barriers on the Development of China's Cross-Border E-Commerce Industry

Abstract

The economy of China has been in a progressive and prosperous condition for a while. The traditional industrial sector of China is a major strength of the Chinese economy. In the current times, the upgradation of this sector, with the advent of newer options such as digitization, is becoming more and more popular, innovative and developed. Due to such introductions, newer economic possibilities, such as electronic commercial activities across borders, are emerging out. Depending on the consumers' choice and demand, a newer export pattern is being developed, in which both the electronic commercial activities across the borders and the conventional foreign trade are evolving, while being intertwined with each other. In this study, it is empirically investigated whether changes in the digitally created trade barriers have an impact on the e-commerce transacted across the borders, taking into consideration some of the influencing factors such as GDP, labor productivity, geographical distance etc. The empirical analysis finds that cross-border e-commerce is negatively correlated with digital trade barriers. Also, an econometric model has been developed to quantify this relationship including the effects of control variables.