The Impact of Cross-Border E-Commerce Comprehensive Pilot Zone Policy on Firms’ Physical Overseas Expansion Behavior

Abstract

This study examines whether the Cross-Border E-Commerce Comprehensive Pilot Zone policy changes firms' internationalization choices. Using panel data for Chinese A-share listed companies from 2010 to 2022, it treats the staggered establishment of pilot zones as a quasi-natural experiment and applies a multi-period difference-in-differences model with firm and year fixed effects. The results show that the policy significantly reduces the probability that firms establish or maintain overseas subsidiaries, indicating an inhibitory effect on physical overseas expansion. This conclusion remains valid after the parallel trends test and robustness checks based on alternative estimation, city-level clustered standard errors, exclusion of the post-2020 sample, and lagged controls. Further analysis shows that the policy significantly increases the likelihood of light-asset internationalization, measured as the presence of overseas operating revenue without overseas subsidiaries. The findings suggest that cross-border e-commerce does not weaken firms' participation in international markets; instead, it provides an alternative, platform-based and lower-cost path. The study offers evidence for improving pilot-zone policies and guiding firms to select appropriate overseas expansion modes.