Nexus of Technology Adoption, E-commerce, and Global Value Chains: The Case of Asia

Abstract

Existing literature has examined either the key drivers of global value chain (GVC) exports or the factors affecting e-commerce growth. Studies that investigate the impact of e-commerce, in particular business-to-consumer (B2C) e-commerce, on GVCs are largely missing. The growing prevalence of digital platforms centered around e-commerce marketplaces motivates this study to examine if e-commerce growth in an economy can affect its GVC exports and how information and communication technology infrastructure and technology adoption measures, payment systems, and delivery mechanisms can facilitate this growth. Panel ordinary least squares, feasible generalized least squares, and two-stage least squares estimations are used to determine the relationship between GVC exports and e-commerce sales. The results indicate empirical evidence of the positive impact of B2C e-commerce on GVC exports. The robust and positive impact of B2C e-commerce on GVC exports—when instrumented by secure internet servers, internet bandwidth, and digital payment schemes—suggests growth of B2C e-commerce in an economy can contribute to its GVC participation.