Great and Small Walls of China: Distance & Chinese E-Commerce

28 Pages Posted: 1 Oct 2015

See all articles by Liang Chen

Liang Chen

Wuhan University

Garrett Johnson

Questrom School of Business

Yao Luo

University of Toronto - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 30, 2015

Abstract

Alibaba’s Taobao is China’s dominant C2C e-commerce platform. Relying on novel transaction level data from its electronics category, this paper examines the roles of distance as well as seller and buyer experience in Chinese e-commerce. Our estimate of a gravity model shows that the distance elasticity in our data is greater than US C2C e-commerce but smaller than that of South America. In addition, we document greater home bias in China than either of the US or South American Settings. Moreover, by estimating a ‘new-new’ trade model using seller-level transaction data, this paper studies the link between seller experience and distance. Our results show that more experienced sellers tend to sell more and export their goods farther into the marketplace.

Keywords: e-commmerce; China, gravity; distance; domestic trade; Internet marketing

JEL Classification: F10, F14, L86

Suggested Citation

Chen, Liang and Johnson, Garrett and Luo, Yao, Great and Small Walls of China: Distance & Chinese E-Commerce (September 30, 2015). Simon Business School Working Paper No. FR 15-28. Available at SSRN: https://ssrn.com/abstract=2668023 or http://dx.doi.org/10.2139/ssrn.2668023

Liang Chen

Wuhan University ( email )

Wuhan
China

Garrett Johnson (Contact Author)

Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
6173534677 (Phone)

HOME PAGE: http://www.bu.edu/questrom/faculty-research/faculty-directory/garrett-johnson/

Yao Luo

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S3G7
Canada

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