## E-commerce as a Potential New Engine for Growth in Asia

_IMF Working Papers, July 1, 2019_

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## Bibliographic details
- Authors: Tidiane Kinda
- Published: July 1, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498317467.001

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### Summary
- The use of e-commerce around the world has accelerated in recent years, with Asia, led by China, spearheading the rise.
- Using cross-country enterprise survey data, the paper shows that firms engaged in e-commerce have higher productivity and generate a larger share of their revenues from exports than other firms.
- In Asia, firms engaged in e-commerce have 30 percent higher productivity and generate about 50 percent more of their revenues from exports.
- Results are robust to the use of instrumental variables, which point to potentially larger effects of e-commerce on Asian productivity and exports when essential elements are in place for its effective use.
- Despite rapid growth, gaps persist in digital infrastructure and legislation, preventing many Asian countries from fully reaping the potential benefits of e-commerce.

### Key Findings
- Firms engaged in e-commerce:
  - Have higher productivity (Asia: 30 percent higher productivity).
  - Generate a larger share of revenues from exports (Asia: about 50 percent more of their revenues from exports).
- The positive associations between e-commerce engagement and firm performance are consistent across cross-country enterprise survey data.
- Instrumental variable analysis suggests amplified e-commerce effects on productivity and exports conditional on supportive infrastructure.

### Robustness and Enabling Conditions
- Findings are robust to instrumental variables estimation.
- Essential elements for effective e-commerce use include:
  - Reliable electricity.
  - Telecommunication infrastructure.
  - Transport infrastructure.
- When these elements are in place, e-commerce effects on Asian productivity and exports may be larger.

### Policy Implications and Barriers
- To better harness e-commerce as a growth engine, policy focus should address persistent gaps in:
  - Digital infrastructure.
  - Legislation related to digital trade and e-commerce.
- Strengthening electricity, telecommunication, and transport infrastructures is important to amplify the benefits of e-commerce for firm productivity and export performance.

*Source: E-commerce as a Potential New Engine for Growth in Asia, Tidiane Kinda, July 1, 2019.*

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_Source: https://www.imf.org/en/publications/wp/issues/2019/07/01/e-commerce-as-a-potential-new-engine-for-growth-in-asia-46950_