A Study On The Effects Of Internet On China’s Export Flow

The Internet has developed rapidly during the past 20 years,and penetrated into all aspects of social life.Specifically,the development of Internet has shown remarkable impact on world trade flow.Thus,the qualitaitive and quantitative research on the impact of the Internet on trade flow is of great importance.In this thesis,the impact of the Internet on China’s export flow is divided into two ways:First,the Internet directly provides an e-commerce platform through which people can engage in cross-border e-commerce activities.We regard this way as a Direct Trade pattern.Second,Internet transmits large amounts of information between countries at a high rate of speed,which enhance the mutual understanding and communication between trade partners.We call it Information Communication which can reduce fixed costs of China’s entry into a specific foreign market.Specifically,through the use of internet,people can conveniently find out information about foreign markets,as well as reduce costs of both advertising the product and establishing a distribution network.The impact of Internet on China’s export flow by Direct Trade pattern can be reflected through calculating the proportion of cross-border e-commerce exports in China’s total exports.We find that China’s cross-border e-commerce exports accounted for an increasing proportion in China’s total export flow:from 7.5%in2008 to 34.6%in 2015.It is easy to forecast that more future export flow will appear in the form of cross-border e-commerce.Internet influences the entire China’s export flow by Information Communication pattern.To study the impact of this pattern,we establish a model to describe the impact of Internet on the growth of China’s export flow under a series of assumptions.In this model,the Internet increases China’s export flow by reducing the fixed costs.The model established in this thesis reflects the impact of the Internet on China’s export flow rather than the"average impact"level of Internet on export flow across countries in previous studies.We derive a model describing the relation between the growth rate of China’s export flow and its determinants.It is predicted by the model that the development of the Internet will increase the growth of China’s export flow,and the growth of GDP in the importing countries will also increase the growth of China’s export flow.The model also brings some uncertainties for the judgment.First,the development of the Internet can be represented by the growth of Internet penetration or the growth of Internet bandwidth.However,the model does not predict whether the growth of Internet penetration or that of Internet bandwidth contributes to China’s export flow.Second,the Internet may,through its development in exporting country,affect the growth of China’s export flow,or else through its development in importing country.But the model does not predict the certain country through which the development of Internet would affect the growth of China’s export flow.Third,the model does not predict the impact of distance between trade partners on the growth of China’s export flow,nor does it preidict the impact of the Internet on the relationship between export trade flow and distance.We conduct a series of empirical studies to clarify the uncertain judgments,as well as to test the effectiveness and correctness of the growth model of China’s export trade flow we established.The results of these empirical studies show that:Firstly,consistent with predictions of our model,the development of the Internet can increase the growth of China’s export flow.Our results suggest that a 10percentage point increase in the growth of China’s Internet penetration leads to about3.2 percentage point increase in its growth of export flow from 2001 to 2015.During the same period,a 10 percentage point increase in the growth of China’s Internet bandwidth leads to about 0.5 percentage point increase in its growth of export flow.However,the impact of the growth rate of the Internet penetration and Internet bandwidth in the importing countries on the growth of China’s export flow is not significant.Secondly,consistent with predictions of our model,the growth of GDP in the importing country can increase the growth of China’s export flow,and the impact of the distance between China and its trade partners on the growth of export flow is not significant.Thirdly,the growth of China’s Internet penetration affects distance preference of China’s export flow.Our results suggest that a 10 percentage point increase in the growth of China’s Internet penetration leads to about 1.1 percentage point more increase in the growth of China’s export flow to long-distance countries.However,the impact of China’s Internet bandwidth growth on the preference of the distance of China’s export flow is not significant.This thesis possibly provides the following innovations:Firstly,we for the first time introduce the Internet bandwidth as a representative of the development of the Internet to carry out empirical research.The results demonstrate the positive impact of Internet bandwidth on the growth of China’s export flow.Secondly,we point out the defects of the model established by Freund C and Weinhold D（2004）^[1].By deducing an overall framework of the impact of the growth rates of various factors on the growth rate of China’s export flow,we further establish a new model to describe the impact of the Internet on the growth of China’s export flow.The model is the basis of our empirical research.Thirdly,we for the first time show that Internet penetration may affect the distance preferences of the growth of China’s export flow.However,the impact of Internet bandwidth growth on the preference of the distance of China’s export flow is not significant.Fourthly,we propose a classification method about the ways of impact of Internet on China’s export flow,including the type of Direct Trade and the type of Information Communication.