The Effect of Foreign E-commerce Support on Exports

This paper analyzes the effects of the JAPAN MALL project, a project by the Japan External Trade Organization (JETRO) to support Japanese firms that are engaged in selling products overseas using foreign e-commerce (EC) platforms. JETRO introduces Japanese firms to foreign EC platforms, and their products will then be posted on the online EC website if the negotiations between the Japanese firms and the foreign EC platforms are concluded. In addition, the Japanese firms can deliver their products to domestic trading firms that will then export these products to foreign EC platforms, thus reducing their transaction costs (e.g., handling customs clearance, international logistics, and etc.).

To analyze the effects, we take a difference-in-differences approach and use a dataset merging the list of Japanese firms that are introduced by JETRO to foreign EC platforms with information on firms from the Basic Survey of Japanese Business Structure and Activities (BSJBSA) by the Ministry of Economy, Trade and Industry (METI). The results show significant pre-trends between supported and non-supported firms, suggesting that it does not satisfy a necessary identification assumption.