Publication
The Korean Journal of Economic Studies
Effect of Online Sales on Growth: Evidence from Korean Manufacturing Establishment
Donghan Shin (Nam Duck Woo Economic Research Institute) and Janghee Cho (Jeju National University)Year 2022Vol. 70No. 3
Abstract
In this paper, we study the effect of online participation of manufacturing
establishments on sales and employment growth. The statistical business
register (from Statistics Korea) and the mail-order registration data (from
Korea Fair Trade Commission) are combined to track the employment and sales
growth of the universe of both online and offline manufacturing establishments.
Using the sample constructed by propensity score matching, we find online
market participation of manufacturing establishments leads to a 6% higher
growth in sales per workers compared to offline manufacturers. Sales growth
exceeding employment growth drives this result, confirming the market
expansion effect of online participation. While the market expansion effect is the
most prominent among manufacturers that have owners younger than 50, that
have more than 4 workers, or that produce consumer goods, other online
manufacturing establishments also exhibit statistically significant and positive
growth effect. Our results imply that the market expansion effect of online sales
can help even the manufacturers previously regarded as less competitive.