Digital Economy Development, International Trade Efficiency and Trade Uncertainty

Fan Xin ()
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Fan Xin: Doctoral candidate at the School of Trade and Economics, University of International Business and Economics, Beijing, China

China Finance and Economic Review, 2021, vol. 10, issue 3, 89-110

Abstract: From the perspective of international trade efficiency and trade uncertainty, this paper analyzes the impact of digital economy development (DED) in importing countries on China’s exports. Theoretically, importing countries’ DED can reduce the trade cost of China’s exports, and then improve the export efficiency of China. On the other hand, the intensified market competition in importing countries resulting from DED and the changes in data transmission policies may also increase the uncertainty of China’s export trade. This paper uses the networked readiness index (NRI) to measure the DED level of different countries, and the heterogeneous stochastic frontier gravity (HSFG) model to empirically analyze the data of China’s exports to 115 countries and regions in the period of 2007−2015. The results show that the DED in importing countries can significantly reduce the loss of China’s export efficiency and improve the efficiency of China’s export trade, and this effect is more obvious for China’s exports to low- and middle-income countries. However, importing countries’ DED may also increase the uncertainty of China’s export trade. The development of global digital economy brings new opportunities to international trade and new challenges to China’s export. This paper provides a basis for China to strengthen its own DED, deepen international exchanges and cooperation, guide enterprises’ transformation and upgrading, and improve their competitiveness and anti-risk capability.

Keywords: digital economy; international trade; trade efficiency; heterogeneous stochastic frontier gravity model (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:cferev:v:10:y:2021:i:3:p:89-110:n:3

DOI: 10.1515/cfer-2021-0018

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