The Influence Factors of China’s Cross-border E-commerce Export Trade Using Gravity Model

Abstract

Purpose - This study examines the influencing factors of China’s cross-border e-commerce exports in the context of the current situation and trends of China’s cross-border e-commerce development. Through an improved trade gravity model, it provides more in-depth research and constructive opinions on the development of cross-border e-commerce in China. In this paper, factors such as consumption gap, volume of trade frictions, number of tourists, Internet usage and trade openness are added to the formula of the traditional trade gravity model in the improved trade gravity model to examine the influencing factors on China’s cross-border e-commerce exports.
 Design/methodology - According to the empirical analysis, China’s cross-border e-commerce exports to ten countries are used as dependent variables, and consumption gap, trade friction volume, trade distance, trade openness and number of Internet users are taken as independent variables. Regression analysis is conducted through a modified gravity model to test whether the hypotheses hold.
 Findings - The analysis shows that the hypothesis that China’s cross-border e-commerce exports are influenced by trade openness, trade distance, consumption gap between trade parties, and the number of Internet users in the importing country is supported by these four hypotheses, but not all independent variables have an impact on them. Specifically, the number of travelers, trade frictions do not have an impact on China’s cross-border e-commerce. That is to say, trade friction between China and the United States and political issues such as China-India and China-Japan territorial disputes that emerged before do not affect the development of cross-border e-commerce in China.
 Originality/value - The analysis shows that the factors influencing China’s cross-border e-commerce exports are the trade openness of the importing country, the trade distance, the number of Internet users in the importing country, and the consumption gap between the two sides of the trade. The trade openness and the number of Internet users positively contribute to China’s cross-border e-commerce, while the consumption gap and trade distance are negatively related to them. And the analysis found that the Sino-US trade war and the Sino-Indian territorial disputes and other trade frictions to China’s cross-border e-commerce exports did not have a substantial impact.