Mitigating transaction risk for cross-border e-commerce firms: A multiagent-based simulation study
Yuxi Chai and
International Business Review, 2022, vol. 31, issue 4
The industry of cross-border electronic commerce (CBEC) has experienced rapid development in recent years, however it has also faced severe challenges concerning the managerial risks taking place across national borders. The aims of the study are two folds: first examine the effects of applying different risk mitigation strategies on the market performance of international online vendors (IOVs) and utilities of consumers; second explore whether consumers’ choices among vendors from different nations based on psychic distance are affected by the risk mitigation strategies of platforms or by the actual frequency of vendors making default moves. A dynamic simulation has been conducted based on four combinations of platform strategies determined by two dimensions of ex ante intervention and ex post investigation. The results indicate that (i) once increasing the frequency of ex post investigation of risk events, customers will suffer less default losses, and both IOVs and customers will gain more utilities; (ii) the profits of ordinary vendors will increase marginally when reducing the frequency of ex ante intervention of high-risk orders, causing a lower degree of shopping concentration; (iii) when platforms adopt risk mitigation strategies of more frequent intervention or higher investigation intensity toward IOVs, the psychic distances of consumers towards IOVs from the same nation and from relatively closer nations become closer.
Keywords: Cross-border electronic commerce; Transaction risk; Risk mitigation strategies; Psychic distance (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:iburev:v:31:y:2022:i:4:s0969593121001839
Ordering information: This journal article can be ordered from
http://www.elsevier. ... me/133/bibliographic
Access Statistics for this article
International Business Review is currently edited by P. Ghauri
More articles in International Business Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().