The Effect Of Online Sale Capability On Chinese Manufacturing Firms’Export Participation

Since the1980s, the rapid development of information technology, especially theemergence of the Internet, has revolutionized the way of human communication. The rise of newbusiness models, such as B2B, has created new trade channels and methods for internationaltrade, and deeply affected the export behavior of firms. This paper will focus on the effects ofonline sale capability on Chinese manufacturing firms’ export participation.Firstly, this paper has analysed the effects of online sale capability on firms’ exportparticipation based on the Melitz heterogeneous enterprise model and we get an inference that afirm which has higher online sale capability will choose export more likely. Then, usingenterprise mircodata from China-Investment Climate Survey2005, the paper applies the Probitmodel to empirically test the inference that we get. Our results suggest that the online salecapability, in general, stimulates the probability of Chinese manufacturing firms’ exportingsignificantly.Moreover, the effects of online sale capability on export participation show heterogeneity infirm’s ownership, scale and industry. Specifically, we find that the online sale capabilityincreases export participation of private-and foreign-firms more significantly than state-ownedfirms, of SMEs more than large firms, and of firms with low added-value products more thanfirms with high added-value products.