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International Area Studies Review
[ Article ]
International Area Studies Review - Vol. 27, No. 2, pp.95-121
ISSN: 2233-8659 (Print)
Print publication date 01 Jun 2024
DOI: https://doi.org/10.69473/iasr.2024.27.2.95

Estimating the Extensive Margin of Exports in the Chinese Market: The Impact of Digital Trade Facilitation on Export Diversification

Wanting Ouyang ; Innwon Park*
Graduate School of International Studies, Korea University, Republic of Korea
Division of International Studies, Korea University, Republic of Korea

Correspondence to: *Email: iwpark@korea.ac.kr

Abstract

This study investigates the causal relationship between digital trade facilitation (DTF) and export diversification, as measured by the extensive margin (EM) of exports in the Chinese market. Findings from a preceding textual analysis of regional trade agreements (RTAs) indicate that high-income countries tend to exhibit better trade performance by engaging in deeper RTAs that have more comprehensive coverage of DTF provisions. Based on our analysis using various gravity regression models, we assert that the implementation of DTF significantly enhances the extensive margin of exports. Our analysis of mediating effects confirms that e-commerce expansion plays a crucial role in amplifying the positive impact of DTF on export diversification within the Chinese market. Furthermore, our findings indicate that the development of DTF and e-commerce is not solely limited by economic size and technology level. Consequently, we strongly encourage small and medium-sized enterprises (SMEs) in developing countries to proactively enhance their DTF capabilities to effectively utilize their RTA network.

Keywords:

Digital trade facilitation, Export diversification, Extensive margin of exports, e-commerce, China

Acknowledgments

This paper is a substantially revised version of Wanting Ouyang’s MA thesis, completed under the supervision of Innwon Park at the Graduate School of International Studies, Korea University. The authors extend their gratitude to the two reviewers, as well as to Professors Dong-Eun Rhee and Do Won Kwak, for their valuable comments and suggestions. All remaining errors are our responsibility.

AI Acknowledgment

Generative AI or AI-assisted technologies were not used in any way to prepare, write, or complete essential authoring tasks in this manuscript.

Conflict of Interests

The author(s) declare that there is no conflict of interest.

Funding

The author(s) declare that there is no funding.

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