Search and Information Frictions on Global E-Commerce Platforms: Evidence from Aliexpress
43 Pages Posted: 13 Nov 2018
Date Written: October 1, 2018
Global e-commerce platforms provide a promising avenue that connects sellers and buyers from different parts of the world. Exporting used to be an activity that was exclusive to large firms; today, e-commerce provides an opportunity for all types of firms, especially small firms, to export—the so-called “great equalizer effect” (Hui, 2016). In the context of trade and development, small firms have been shown to be one of the main drivers for job creation and innovation.1 Therefore, the inclusion of small firms in international trade through e-commerce could have important economic implications. Exporting also allows firms in developing countries to penetrate higher-end consumer markets, where there is high willingness to pay for quality. Such market access could facilitate domestic quality upgrading, either through the income-based quality-choice channel (Bastos, Silva, and Verhoogen, 2018) or the learning-by-doing channel (Atkin, Khandelwal, and Osman, 2017).
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