The Effects of Government Licensing on E-commerce: Evidence from Alibaba / Ginger Zhe Jin, Zhentong Lu, Xiaolu Zhou, Chunxiao Li.

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Jin, Ginger Zhe

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w27884.Publication details: Cambridge, Mass. National Bureau of Economic Research 2020.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: Using proprietary data from Alibaba, we examine how the 2015 Food Safety Law (FSL) affects e-commerce in China. The FSL requires most food sellers on e-commerce platforms to obtain a valid, online license for retail food handling. Because the FSL was rolled out progressively, we have a rare opportunity to observe a gradual transition from voluntary certification to partial licensing and mandatory licensing.Abstract: Data summary shows that, conditional on sellers with valid licensing information, those that had a better online reputation and more online food sales before FSL tend to display their FSL license earlier on the platform, and buyers are more willing to transact with a seller after she displays her FSL license.Abstract: To identify the causal impact of the FSL, we compare food and non-food categories via synthetic control matching. We find the average quality of surviving food sellers has improved after partial and mandatory licensing, partly because those who are unwilling to obtain the FSL license must exit the platform. Despite an increase in seller concentration, the platform's gross merchandise value (GMV) in the food category did not decline post FSL, nor did the average sales price increase significantly one year into full enforcement of the FSL.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w27884 (Browse shelf(Opens below))	Not For Loan

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October 2020.

Using proprietary data from Alibaba, we examine how the 2015 Food Safety Law (FSL) affects e-commerce in China. The FSL requires most food sellers on e-commerce platforms to obtain a valid, online license for retail food handling. Because the FSL was rolled out progressively, we have a rare opportunity to observe a gradual transition from voluntary certification to partial licensing and mandatory licensing.

Data summary shows that, conditional on sellers with valid licensing information, those that had a better online reputation and more online food sales before FSL tend to display their FSL license earlier on the platform, and buyers are more willing to transact with a seller after she displays her FSL license.

To identify the causal impact of the FSL, we compare food and non-food categories via synthetic control matching. We find the average quality of surviving food sellers has improved after partial and mandatory licensing, partly because those who are unwilling to obtain the FSL license must exit the platform. Despite an increase in seller concentration, the platform's gross merchandise value (GMV) in the food category did not decline post FSL, nor did the average sales price increase significantly one year into full enforcement of the FSL.