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The E-Commerce and Global Value Chains
Published October 6, 2023
Publication Source: KIEP
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We investigated the impact of e-commerce on global value chains (GVC). Using firm-level data from Korea for the period 2006-2014, we found that firms that adopted an integrated e-commerce management system had a significantly higher probability of participating in GVC, particularly for firms with productivity levels below the upper quartile. We also examined the implications of firm-level e-commerce participation for the aggregate GVC trade using a theoretical model. The model showed that e-commerce facilitates GVC trade and makes the trade volume more responsive to trade costs. From these results, we conclude that supporting SMEs in their digital transformation and e-commerce participation can be effective in promoting SMEs’ participation in GVC. We also highlight that efforts to reduce trade costs remain imperative, even as e-commerce becomes more prevalent.

This paper was published by KIEP. KIEP retains the copyright to this paper and invites readers to share and cite the work with attribution to both the author(s) and KIEP.