International Conference on Education Technology and Management Science (ICETMS 2013)

An Empirical Study on E-commerce’s effects on Economic Growth

Sixun Liu
Department of Economics，
Xiamen University,
Xiamen, China
e-mail: liusixunjiayou@163.com

Abstract-With the rapid development of computer network and medium enterprises tide over the difficulty, stimulating
technology and information and communication technology, domestic demand and creating jobs. It is exactly with its
e-commerce has become an economic hot spot and trend. Based unique business model and inherent potential that
on the GDP accounting by expenditure method, this paper e-commerce has attracted widespread concern and
analyses and expounds the impact mechanism of e-commerce developed a new area of study for scholars.
development to the national economic growth. It uses As we all know, there is a close relationship between
econometric model to get empirical research between e-commerce and national economy. A series of microscopic
e-commerce development and economic growth using the latest behavior with positive effect exerted on enterprises by
data of Chinese e-commerce development to reach the
e-commerce will definitely lead to macro-economic
conclusion that e-commerce can promote economic growth. At
last, the paper proposes appropriate e-commerce development
development and accelerate the development of national
approaches to make e-commerce have a greater role economy. There is no doubt that e-commerce can promote
in economic growth. the transformation of economic growth pattern. It not only
inject new vitality into more high-tech companies, drive the
Keywords-e-commerce; economic growth; expenditure structure optimization and upgrade the traditional industries,
method; empirical analysis but also become the growth point of China's modern
logistics industry and economic development. Hence, with
I. INTRODUCTION the increasing economic globalization and developing
information technology nowadays, it is necessary for further
Accompanied by the continuous development of modern
research into the impact mechanism and concrete impact on
information technology and global economic integration,
China's economic growth exerted by e-commerce, which
e-commerce came into being. E-commerce refers to the sum
will help our country to exert subsequent advantages and
of commercial activities and non-profit business or service
seize the favorable opportunities of the development of
activities with the application of modern computer, network
e-commerce in order to realize the economic surpassing
technology and modern information communication
strategy for this century.
technology and it is a new form of trade emerged with the
application of electronic information technology in trade II. THE MECHANISM OF E-COMMERCE ’S
field. Compared with the previous traditional business, EFFECTS ON ECONOMIC GROWTH
e-commerce has several distinct advantages such as fewer
links, faster speed and smaller pressure of inventories for The gross domestic product (GDP) is considered to be a
enterprises. relatively good indicator to reflect the economic
During more than ten years’ development of e-commerce development level. The analysis of the mechanism of
in China, the scale of e-commerce industry has gradually e-commerce’s effects on economic growth is based on the
expanded, with more and more people being engaged in this expenditure method of GDP accounting. According to the
industry. A good environment including favorable expenditure method, GDP is composed of consumption,
infrastructure, policy and market makes e-commerce to investment, government purchase and net export, which is
flourish, especially since 2006, Chinese e-commerce has GDP = C + I + G + ( X − M ) by formula. How e-commerce
enjoyed a rapid development and increasing expanding stimulates economic growth through the consumption,
market scale, entering into a period of rapid growth ，with investment, government purchase and net export is discussed
an inspiring developing trend. The financial crisis in 2008 following and the mechanism provides a theoretical basis for
swept the world and each country’s economy is affected in the following empirical analysis. Firstly, the development of
different degree, while the development of e-commerce has e-commerce has led to the development of some emerging
shown us its infinite vitality. The total volume of China's industries such as logistics, and created more jobs in
e-commerce transactions in 2008 has exceeded 3 trillion industries such as computers and the internet, thus stimulates
Yuan, with an increase of more than forty percent compared the consumption. Since e-commerce has provided people
to the same period. The year of 2009 is an e-commerce year, with a wide variety of products and met people's material
during which, the development of domestic B2B and cultural needs to a greater extent, more and more
e-commerce has played a tremendous role in helping small consumers have been keen in online shopping, increasing
the consumption spending. E-commerce, with its efficiency

© 2013. The authors - Published by Atlantis Press 81

and convenience and the characteristics of breaking through development to carry out an empirical analysis of the
the limit of time and space, it has largely attracted businesses relationship between the two parts.
and consumers, both of which can work together to promote To be specific, the development of e-commerce has
economic development. Besides, if consumers are optimistic stimulated consumption via the increase in the number of
about the prospects of e-commerce, they will spend more on internet users and the number of online shopping users,
things such as computers, which will also lead to the while positive changes in the size of the scale of online
increase of consumption. advertising reflect an expected positive change in investment,
Secondly, in terms of investment, to compete for the the increase in the number of CN domain name and website
customers, all e-commerce companies must guarantee to reflects the increase of government purchase, and the
provide items within the scope of the time and place increase of the number of international outlet bandwidth can
specified by the customers to meet their demands, which increase net exports. Therefore, we selected the GDP as the
will require a large amount of money in related areas such as dependent variable, the number of CN domain name (CN),
quantitative stock, transport infrastructure, leading to the the international outlet bandwidth (DK), the number of
increase in fixed capital investment. The prosperity of Internet users (SWYH), the number of online shopping users
e-commerce has also brought the prosperity of other (WGRS), the scale of online advertising (WLGG) and the
industries, such as the advertising industry. The development number of websites (WWW) as independent variables to set
of e-commerce has promoted the development of network the model as follows.
advertisement and stimulated the potential of advertising GDP= C + β1CN + β2 DK + β3WYH+ β4WGRS+ β5WLGG+ β6WWW+ μ
investment demand. From a practical point of view, In order to eliminate the smoothness of the data, these
e-commerce can expand the sources of funding and support variables were natural logarithm. This paper uses the time
the construction of economic system. Facing the global series data to estimate the regression model, and adopt the
financial crisis in 2008, e-commerce was the important data from the China Statistical Yearbook 1997-2011, “China
choice for company in China to tide over the difficulty. Internet Development Status Analysis Report” (1-29th)
Thirdly, in order to meet the transportation demands issued by the China Internet Network Information Center,
required by the rapid development of e-commerce, the and “Investigation Report on Chinese E-commerce from
increasing demands for related roads and transportation 1997 to2009 " provided by B2B Research Center in China as
means, which will lead to an corresponding increase of a sample to carry out correlation and regression analysis.
government procurement in this area . Similarly, in response
to the growth of auxiliary services demands, infrastructures B. Data Stationary Test
such as power generation and communication network must When using regression methods to study the relationship
be upgraded, which will also increase government between time series, one must first examine whether the
procurement expenditures. In addition, due to the strict original sequence is stationary. If the original sequence is
requirement of e-commerce on network data security, non-stationary，then though the regression test shows that
corporate business credit and personal credit, government there is a significant relationship between the sequences,
will increase related procurement expenditures to ensure the this return is in fact " spurious regression" . Therefore, it is
normal operation of e-commerce. necessary to first test the stationarity of all the variables
Finally, since e-commerce has achieved a smooth before the co-integration test. This paper adopted the ADF
flow of information dissemination, it is beneficial to help unit root test; the following table shows the results of unit
improve the international reputation of its enterprise root test of original sequence of each variable and the first
products and services, which undoubtedly has played an order differential sequence:
important role in expanding exports. Besides, the
applications of e-commerce enable us to participate in the TABLE I. TIME SERIES OF ADF UNIT ROOT TEST
international market competition more effectively and gain
Method ADF 5% Critical
advantages and initiative to obtain greater benefits in the Variable
(C,T,K) Statistic value
Conclusion
process of economic globalization and promote rapid and GDP (c,0,3) -2.573425 -3.175352 non-stationary
healthy development of economy. CN (c,0,0) -2.411520 -3.098896 non-stationary
DK (c,t,2) -3.021037 -3.875302 non-stationary
III. EMPIRICAL ANALYSIS OF E-COMMERCE’S SWYH (0,0,1) -0.247916 -1.970978 non-stationary
EFFECTS ON ECONOMIC GROWTH WGRS (0,0,2) -0.344027 -1.602922 non-stationary
WLGG (c,0,2) -2.233257 -3.144920 non-stationary
A. Selection of Variables and Data WWW (c,t,0) -2.013571 -3.791172 non-stationary
Based on the analysis above, e-commerce can promote △GDP (c,0,3) -3.942752 -3.212696 stationary
△CN (0,0,0) -2.338408 -1.970978 stationary
economic growth through four components of GDP by
△DK (c,t,3) -8.073435 -4.008157 stationary
expenditure approach accounting. Therefore, this paper △SWYH (0,0,0) -2.249905 -1.970978 stationary
chooses several related indicators representing consumption, △WGRS (c,0,3) -4.663327 -3.212696 stationary
investment, government purchases and net exports △WLGG (c,0,2) -6.269093 -3.175352 stationary
respectively to reflect the development of e-commerce, and △WWW (0,0,0) -2.426158 -1.970978 stationary
chooses GDP to represent the level of economic

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 It can be seen from the table above that, under the reflecting the long-run equilibrium relationship between
significant level of 5%, the absolute value of all variables of GDP and each factor do exist.
the original sequence of the ADF test values are all below
the absolute value of the threshold of 5% , which means that D. Analysis on Empirical Results
the original sequence of each variable exists unit root, that Based on the analysis above, the regression
is , they are non-stationary. Their first-order differential co-integration equation has a good property and high fitting
absolute values of the ADF test values are all surpass the degree. The value of t-statistics all passing the test under the
absolute value of the 1% threshold, indicating that the first significant level of 5% reflects the long-term equilibrium
difference sequence of each variable does not have unit root relationship between all variables. In the long run, GDP and
and is stationary. Therefore, each variable is first-order other variables are positively correlated as expected,
stationary, Satisfying the premise of the co-integration test, showing that the increase of the number of CN domain
which makes it possible to further establish the long-term name, international bandwidth, the number of internet users,
co-integration equation on GDP and each explanatory online shopping number, the scale of online advertising, as
variable. well as the number of websites has all played positive roles
of growth of GDP, and these variables represent the level of
C. Co-integration Test development of e-commerce in consumption, investment,
The objects of the co-integration test can be divided into government purchase and net export respectively , so that
two kinds: one test is based on the regression coefficient, the conclusion can be drawn that e-commerce is indeed a
which is the Johansen test; another is based on regression promoter on the domestic economy. Among these
residuals, such as the ADF test. Taken the actual situation explanatory variables, the coefficient of the scale of online
and scope of application of each test method into advertising is the highest, indicating that in recent years, the
consideration, this paper takes the second co-integration test development of e-commerce has accelerated rapid expansion
methods. of online advertising investment. The network, with its
First of all, under the premise that all the variables are tremendous influence, has provided a broader platform for
first order stationary, the regression equation can be the development of the advertising industry, accelerating
estimated as follows: driven economic growth.
GDP = 14.2541327109 + 0.126125363057 CN+
0.225294871201 DK + 0.283105731849 SWYH + IV. POLICIES AND PROPOSALS
0.196238624245 WGRS + 0.580651974925 WLGG In order to make e-commerce have a greater role in
+ 0.170317687317 WWW economic growth， national government, enterprises and
consumers need to pay more attention to e-commerce, to
t=（23.19447）（2.486621）（2.721281）（2.880147）
increase investment in infrastructure, pushing more internet
(2.398653) (5.931531) (2.912025) users to develop online shopping habits so as to improve the
R-squared=0.985995, F=165.2687, DW=2.087268 overall development level of the e-commerce , thus
It can be observed by looking up the table that under the promoting the effective national economic growth. In this
given significant level of 5%, coefficients of t-statistics of all regard, the following four proposals should be taken into
Explanatory variables have passed the test, indicating that all consideration:
the estimated values of coefficients are significant. From the First, improve the infrastructure of e-commerce systems,
perspective of the whole significance of the model, the value and increase government expenditures.
of F-statistics is so high that it shows the model overall is Government should actively support the construction of
significant. Besides, the value of R-squared is up to e-commerce infrastructure, increase government
0.985995, indicating the model has high fitting degree. Since expenditures in the information technology infrastructure
the data is time series data, it can be assumed that the and conduct reasonable guide on the funds investment.
heteroscedasticity is non-existent, and that the DW value Meanwhile, it is necessary to accelerate the construction of
being 2.087268 shows the serial correlation does not exist. high-speed information transmission backbone network and
Secondly, through unit root tests on the residuals of the broadband Internet, increase Internet speed and reduce
regression equation, the estimated residual from the Internet access costs. Government should further strengthen
estimated results of the regression equation can be obtained the introduction and development of electronic information
as follows: technology hardware and software and shorten the gap from
μ= GDP − 14.2541327109 − 0.126125363057 CN − those countries developed in internet. For those e-commerce
0.225294871201 DK − 0.283105731849 SWYH − development projects which are important but are difficult in
0.196238624245 WGRS − 0.580651974925 WLGG investment, government can take a direct investment or
government-oriented measure to support the construction of
− 0.170317687317 WWW
enterprise e-business.
The ADF test value of μ is -3.619330, and it is higher
Secondly, promote and improve the electronic settlement
than the critical value under the significant level of 5%,
system, and promote consumption increase.
which is -3.098896, from which it can be seen that the
In the B2C area, barriers to online transactions are
residual series is stationary, which also verify the
co-integration relationship of the empirical model is correct, mainly displayed in the means of payment. Currently，there
is not a uniform communication platform applied by each

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State-owned banks , credit card of each bank can not be
universal and it is difficult to achieve online payment with
credit card. Therefore, it is strongly suggested to establish
uniform standards as soon as possible, encourage the
commercial banks, CUP, third-party payment services
institutions to establish a good working relationship with
commercial enterprises and e-commerce businesses and to
expand the scope of application of the credit card and other
electronic means of payment in order to promote the
development of online transactions.
Thirdly, establish online security certification system and
promote business investment.
Network security is the issue that enterprises mostly
worried about when using e-commerce, so that how to
protect the security of e-commerce business activities will
always be the core area of e-commerce study. Therefore, the
establishment of the mechanism and system of CA is
necessary. CA can protect equal status of security of the
parties in the transaction on the internet. Besides, CA should
be served by the authority authorized by the State to promote
e-commerce is operated in the safe, orderly environment.
Last,but not the last, promote the building of logistics
system and increase business investment.
All kinds of logistics enterprises should actively improve
the level of information ，optimize the logistics processes
and improve logistics and distribution system to improve the
delivery efficiency and reduce logistics costs, and providing
good support service for e-commerce. It is also suggested to
promote third-party logistics system and improve the
specialization of logistics enterprises. Logistics enterprises
should actively introduce and utilize foreign advanced
logistics technology and equipment to integrate
inter-enterprise resources and strengthen cooperation with
foreign logistics enterprises. A modern logistics system
needs to be gradually established to promote the
development of e-commerce.
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