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The Macro-economic Impact of Cross-border eCommerce in the EU

Joseph Francois, Bertin Martens () and Fan Yang ()
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Fan Yang: Hohenheim University

No 2014-10, JRC Working Papers on Digital Economy from Joint Research Centre

Abstract: We use data on cross-border e-commerce between EU Member States to estimate the implied cross-border trade cost reduction when consumers move from offline to online consumption. We plug this trade cost estimate into a macro-sector multi-country CGE model to estimate the impact of online retailing on consumers as well as producers. We find that cross-border e-commerce increases real household consumption. However, the domestic spill-over effect squeezes price margins in the retail sector and has a negative output effect for that sector. The resulting retail sector efficiency gains have a positive effect on production in other sectors. The combined macro-economic effect of these transmission channels is generally positive for EU Member States, ranging between 0.07 and 0.25 per cent of GDP. As such, this paper adds an innovative macro-perspective to existing micro-economic estimates of the impact of e-commerce on consumer welfare.

Keywords: e-commerce; online trade; cross-border trade; international trade; EU digital single market; CGE model; non-tariff barriers (search for similar items in EconPapers)
JEL-codes: C54 F14 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014-09
New Economics Papers: this item is included in nep-cmp, nep-eur, nep-ict and nep-int
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