Digital Infrastructure, E-Commerce, and Foreign Trade: Evidence on Regional Heterogeneity

This study examines how digital infrastructure and e-commerce are associated with foreign trade across China’s provinces and whether these relationships vary regionally. A provincial panel covering 2000–2022 is analyzed using ordinary least squares with panel-corrected standard errors and two-way fixed effects. System Generalized Method of Moments and an instrumental-variable specification provide complementary robustness assessments. Fixed broadband subscriptions represent digital access, whereas e-commerce transaction volume represents realized online commercial use. The estimates show positive and statistically significant associations between both digital measures and trade volume. Their signs remain stable across the specifications. Foreign direct investment, patent activity, and urban employment are positively associated with trade. Regional estimates reveal a geographical gradient. The coefficients for digitalization and e-commerce are largest in eastern provinces, moderate in central provinces, and smallest in western provinces. This pattern indicates that infrastructure availability and commercial utilization do not correspond with uniform trade outcomes across space. The study contributes by distinguishing digital access from its market use and by placing regional conversion capacity at the center of the analysis. The findings are interpreted as conditional associations rather than definitive structural parameters. They concern foreign trade performance and do not provide evidence on environmental or social sustainability outcomes.