The E-Commerce and Global Value Chains

Sangjun Yea () and Seungrae Lee ()
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Sangjun Yea: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] Building C Sejong National Research Complex 370 Sicheong-daero Sejong-si Korea,, https://www.kiep.go.kr/eng/
Seungrae Lee: Hankuk University of Foreign Studies, Postal: Seoul Campus 107, Imun-ro, Dongdaemun-gu, Seoul, 02450, Korea, , Global Campus 81, Oedae-ro, Mohyeon-eup,Cheoin-gu, Yongin-si, Gyeonggi-do, 17035, Korea",

No 23-34, World Economy Brief from Korea Institute for International Economic Policy

Abstract: We investigated the impact of e-commerce on global value chains (GVC). Using firm-level data from Korea for the period 2006-2014, we found that firms that adopted an integrated e-commerce management system had a significantly higher probability of participating in GVC, particularly for firms with productivity levels below the upper quartile. We also examined the implications of firm-level e-commerce participation for the aggregate GVC trade using a theoretical model. The model showed that e-commerce facilitates GVC trade and makes the trade volume more responsive to trade costs. From these results, we conclude that supporting SMEs in their digital transformation and e-commerce participation can be effective in promoting SMEs' participation in GVC. We also highlight that efforts to reduce trade costs remain imperative, even as e-commerce becomes more prevalent.

Keywords: E-Commerce; Digital Trade; Global Value Chain; GVC (search for similar items in EconPapers)
Pages: 6 pages
Date: 2023-10-06
New Economics Papers: this item is included in nep-int and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwe:2023_034

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