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The Impact of Internetization on the Increase of Chinese Domestic Value Added in Exports

【Authors】
SHEN Guobing, YUAN Zhengyu
【WorkUnit】
Fudan University, 200433.
【Abstract】

A large number of studies have discussed the factors affecting the value added in exports. Based on the model of Melitz (2003), we introduce the internetization of enterprises for expansion, and find that with the increase in the degree of internetization, enterprises will use more domestic intermediate input. Based on the matching data of China Customs Database, China Industrial Enterprise Database and Sina Weibo data, our study shows that: (1) from the perspective of trade mode, a higher degree of internetization helps to increase the ratio of domestic value added in exports for ordinary trade enterprises. (2) By looking at the enterprises' ownership, provincial region and export duration, it is found that the internetization's effect on increasing the use of domestic intermediate input varies with the enterprise' ownership, provincial region and stability of participating in the global production network; this effect is more significant on non-state-owned enterprises, enterprises in eastern China and enterprises of sustainable export. (3) The results of the mediation effect test show that internetization mainly increases the ratio of Chinese domestic value added in exports by increasing the use of domestic intermediate input. Accordingly, in the digital economy, enterprises increase the use of domestic intermediate input by strengthening the integration of their own business with the Internet, which helps to enhance the competitiveness of Chinese exporters.


JEL:D21, F12, L86

【KeyWords】
Internetization, Domestic Value Added in Exports, Domestic Intermediate Input