Facilitating Inclusive Global Trade: Evidence from a Field Experiment

Information technology (IT) enables and facilitates trillion-dollar international trade. This paper studies whether the efficiency of IT-enabled trade on e-commerce platforms can be improved by integrating export logistic services. Exploiting a site-wide randomized experiment on eBay, I show that integrating the service of handling customs clearance and international shipping profitably increased cross-border trade on eBay by at least 2.9% through the extensive margin of export. The increase comes from groups where export entry costs are prohibitive: Small and medium sellers, more distant countries, and products with smaller price-to-shipping ratios. Foreign consumers benefited from higher marketplace quality through a change in seller composition and a 1% increase in product variety. Foreign sellers experienced no sales cannibalization on average but experienced higher competition from U.S. sellers in differentiated goods categories. Back-of-the-envelope calculations suggest that 91% of the export response is explained by a reduction in export entry cost, manifested in the hassle cost of learning export procedures on eBay. I discuss implications for e-commerce platforms and government agencies.