Ecommerce and Firm Performance: Evidence from Korea
Lee, Kyu Yub | June 2017
Abstract
Official estimates peg global business-to-business ecommerce at 15 trillion dollars and global business-to-consumer ecommerce at 1.2 trillion dollars in 2013 (UNCTAD 2015). When we turn to official estimates for Korea, it is easy to find that Korea’s business-to-consumer ecommerce market is growing at more than twenty percent per year and has emerged as the third largest global ecommerce market in Asia. It is not very much surprising to know the numbers for Korea since Korea is one of the world’s most advanced countries in terms of information and communication technology. However, it is somewhat surprising that we know little about how ecommerce firms or establishments are distributed in the economy of Korea. In addition, we know little about how ecommerce establishments perform relative to their counterparts of a similar age and size in the same industry.
The paper aims to characterize and test performance differences between ecommerce and non-ecommerce firms or establishments. Although the number of ecommerce establishments makes up a small fraction of the economy, ecommerce establishments have a heavier weight in sales, employment, and wage. Due to endogeneity of ecommerce variable, the paper reconstructs the 2010 Korea Census dataset by using Propensity Matching Score and shows that in manufacture ecommerce establishments have, on average, larger sales-per-worker and pay higher wage whereas in services ecommerce ones have higher sales-per-worker but pay no larger wage than their counterparts of a similar age and size in the same industry. It also adds quantile estimates showing that sales-per-worker differences between ecommerce and non-ecommerce establishments in manufacture are positive and statistically significant only at lower quantiles of the distribution. In services, sales-per-worker differences between them are positive and significant at most of distribution but turns to be negative, though not significant, at above upper quantile of the distribution.
Citation
Lee, Kyu Yub. 2017. Ecommerce and Firm Performance: Evidence from Korea. © Korea Institute for International Economic Policy. http://hdl.handle.net/11540/7832.Print ISBN
978-89-322-4272-9
Keywords
Trade And Development
Large Scale Industry
Regional Trade
Commerce and Industry
Trade Negotiations
Merchandise Trade
Domestic Trade
Computer Industry
Trade Regulation
Telecommunication Companies
Rural Rehabilitation
Biotechnology
Interindustry Trade
Industrial Policy
Industrial Investment
Industrial Development
Small Scale Industry
Medium Scale Industry
Local Industry
Transport Infrastructure
Trade regulations
Telecommunications Industry
Computers
Trade data interchange
Access to markets
E-Commerce
Rural development
Unfair competition
Supply and demand
Energy policy
Developing countries
Industrial organizations
Creative industries
Investment banking
Microfinance
Financial planning industry
Infrastructure
Manufactures
Business failures
Wages and labor productivity
Microelectronics industry
Electronic industries
Digital electronics
Microelectronics
Electronic commerce
Business enterprises
Digital
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