Search and Information Frictions on Global E-Commerce Platforms: Evidence from Aliexpress

Moynihan Institute of Global Affairs

Trade, Development and Political Economy

present

Jie Bai

Assistant Professor in Public Policy, Harvard Kennedy School

Search and Information Frictions on Global E-Commerce Platforms: Evidence from Aliexpress

 

We  study  how  search  and  information  frictions  shape  market  dynamics  in  global  e-commerce.   Observational data and self-collected quality measures from AliExpress establish the existence of search and information frictions. A randomized experiment that offers new exporters exogenous demand and information  shocks demonstrates the potential role of sales accumulation in enhancing seller visibility and overcoming  these demand frictions. However, we show theoretically and quantitatively that this demand-reinforcement mechanism is undermined by the large number of online exporters. Our structural model rationalizes the experimental findings and quantifies efficiency gains from reducing the number of inactive sellers.

 

Professor Bai is an Assistant Professor in Public Policy at Harvard Kennedy School. She received her Ph.D. in Economics from Massachusetts Institute of Technology in June 2016 and spent one year at Microsoft Research New England prior to joining HKS. Her research lies at the intersection between development, trade and industrial organization, focusing on microeconomic issues of firms in developing countries and emerging markets. Her past projects have examined firms’ incentive and ability to build a reputation for quality, collective reputational forces in export markets, the relationship between firm growth and corruption, and the impact of internal trade barriers among Chinese provinces on firms’ export behavior. Her current ongoing work includes studying growth and reputation dynamics in global e-commerce platforms, technology transfer and knowledge spillovers in the Chinese auto industry, and quality upgrading of the Ugandan coffee sector.

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