This report presents research on the effects a recent trade policy change has had on online commerce to and from a remote region. In July 2017, the Canary Islands’ low value threshold, the so-called de minimis below which imports are exempt from local sales tax and customs paperwork, was raised. This reform is part of a strategy to internationalise the islands’ economy and aims to strengthen consumer purchasing power. We have studied the effect this policy change has had on eBay transactions to and from the Canary Islands. We have also looked at the effect the 2016 increase of the U.S.
This paper looks at the ability of small online commercial enterprises to adapt to macroeconomic changes. The analysis is based on the European Commission’s study of how companies of different sizes attempted to rebalance their export destinations in response to significant relative decrease in export opportunities within Europe due to the recent economic and financial crisis. All size classes of European exporters attempted to expand their extra-EU exporting relative to intra-EU exports as demand from outside of Europe grew more rapidly relative to demand from within Europe. All size classes of business achieved a rebalancing in favor of more pronounced extra-EU exports. However, the largest businesses were more adaptable and flexible. We have replicated this analysis for EU eBay-enabled firms and found that they showed the strongest rebalancing of export destinations: they exceeded even the rate of rebalancing toward extra-EU exports of the largest European businesses, and they were considerably more adaptable than the general classes of small business exporters. Government export support programs should take this learning into account. We recommend partnerships between towns or regions, the local businesses and online commerce platform providers to bring platform-based exporting to local MSMEs.
We also invite you to view the accompanying infographic which provides a quick snapshot of the data.
What’s in the report?
This in-depth provides insights into the trade and growth of eBay-enabled small businesses across Italy at the national and regional levels. Using trade data, the report describes how the online platform model for commerce is allowing small businesses and entrepreneurs throughout Italy to extend their geographic reach and actively engage with customers across Europe and around the world. The report also includes an analysis of new enterprise formation on eBay compared to the traditional economy based on regional disparities. Key findings include that nearly every eBay-enabled small business in Italy is an exporter and that a number of regions with the highest poverty rates and unemployment rates have some of the most robust and fastest-growing eBay-enabled small business communities.