Can cross-border e-commerce development improve supply chain efficiency? Empirical evidence from China

Cross-border e-commerce (CBEC) is becoming critical for a strong supply chain. Using data from Chinese listed firms and a difference-in-difference (DID) model, this paper examines the impact of CBEC development on supply chain efficiency from the perspective of enterprise inventory. CBEC significantly reduces enterprises' non-finished goods inventory and improves supply chain efficiency. The mechanism tests reveal three ways in which CBEC optimizes enterprises' inventory and enhances supply chain efficiency: improving the performance of upstream-facing sourcing, increasing the efficiency of enterprises' product transformation, and optimizing downstream-facing demand coordination. The heterogeneous results suggest that CBEC has a greater impact on the supply chain efficiency of firms with high operational volatility and capital intensity and low digitization levels. Further, the effect of CBEC on the reduction of non-finished goods inventory is more significant in regions with weak infrastructure development and location endowment. This study provides empirical evidence for the emerging development topic of new international trade patterns empowering industrial supply chains.