How to Mitigate Information Asymmetry in Cross-border E-commerce Transactions?Evidence from Cross-border E-commerce Quality Certification
Cross-border e-commerce,as a new format that organically integrates international trade and digital technology,is increasingly becoming a significant driving force for China's foreign trade transformation in the era of the digital economy.However,realizing the stabilizing role of cross-border e-commerce in foreign trade faces multiple challenges,with the dilemma of a"lemon market,"in which information asymmetry is one of the prominent causes.To address this issue,reputation mechanisms,which primarily include rating and certification,have been designed by cross-border e-commerce platforms.Among these,the rating mechanism is susceptible to exploitation by dishonest enterprises,which may negatively impact consumer welfare.In contrast,certification mechanisms,leveraged by third parties to comprehensively evaluate the quality of enterprises or products,have greater systemic and authoritative qualities.Therefore,can certification help both buyers and sellers overcome the"lemon market"dilemma in cross-border e-commerce market transactions?To answer this question,this study develops a dynamic reputation model on quality certification with limited information.Then,it examines the effect of a product-level certification mechanism on cross-border e-commerce by implementing a regression discontinuity design(RDD)based on the product certification policy of Wish-a global leader in mobile cross-border e-commerce.Detailed weekly product data are used to facilitate this study.It reveals that quality certification on the cross-border e-commerce platform has a notable impact on market transactions.Certified products experience a 10.5％increase in sales and an average of 3.0％increase in prices.The mechanism analysis reveals that the reputation effect primarily stems from the quality signal introduced by certification,which mitigates quality uncertainty.This boosts manufacturers'confidence in pricing and augments consumers'intent to make purchases.The expansion analysis reveals several key findings.First,the effect of certification is not completely symmetrical;although loss of certification leads to lower prices,it does not significantly impact product sales.Second,certification may elevate consumer quality expectations,resulting in a decrease in ratings by approximately 0.7 percentage points.Lastly,certification does not generate spillover effects on other products of a company.However,it leads to a decline in sales for uncertified products in the same industry,thereby enhancing the market concentration of high-quality products.Compared with existing literature,this article makes the following contributions:First,it utilizes a unique certification policy and employs RDD for cleaner identification of the causal effects between certification and market transactions,thereby bolstering the credibility of existing research conclusions.Previous studies primarily utilized two-way fixed effects analysis.However,due to unobserved product heterogeneity,accurately identifying the causal effects of quality certification was challenging.This article employs a quasi-experimental method to effectively mitigate the endogeneity issues associated with certification.Second,this study expands the literature on certification from the perspective of enterprise quality uncertainty to product quality uncertainty,providing a more intuitive demonstration of the impact of quality signals on market transactions.It is also a novel study to reveal the spillover effects of quality signals in firms and industries.Third,for the first time,this study explores the interactive effects between certification and rating,which are two crucial reputation mechanisms.Existing research has mainly revealed a certain degree of substitutability between these two reputation mechanisms regarding their impact on consumer purchase intentions,but there is a lack of research on how these mechanisms interact with each other.Certification implicitly alters consumers'quality expectations for products,thereby potentially affecting consumers'final evaluations of the products.This study finds that quality certification leads to a 0.7 percentage point decrease in product ratings,providing important insights for cross-border e-commerce enterprises and platforms to better understand the market response caused by certification.This study recommends that the government should guide cross-border e-commerce platforms to establish fair and reasonable certification standards to break through the dilemma of the"lemon market"and promote the high-quality development of digital trade.
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