Cross-Border E-Commerce Pilot Zones and Greenfield Foreign Investment: Evidence from China

Cross-border e-commerce, as a vital form of digital trade, is emerging as a new engine for corporate internationalization. This study employs China’s cross-border e-commerce pilot zones (established since 2015) as a quasi-natural experiment to investigate their causal effects on Chinese cities’ outward foreign direct investment (OFDI) and the underlying mechanisms. Distinct from previous trade-focused studies, this paper innovatively adopts a greenfield investment perspective. By integrating the Global Greenfield Investment Database (2010–2022) with the China City Statistical Yearbook, we constructed a greenfield OFDI dataset spanning the city–destination–target industry dimensions. Based on this dataset, this study employs a time-varying DID approach combined with PSM-DID, parallel trend tests, and placebo tests to empirically analyze how cross-border e-commerce development influences OFDI and its underlying mechanisms. The findings reveal that establishing cross-border e-commerce pilot zones boosts local outward investment by approximately 18.8%. A binary marginal decomposition analysis indicates that this effect primarily manifests through the extensive margin—significantly driving investment into new destination markets. Additionally, the mechanism operates by reducing information search costs and enhancing factor allocation efficiency. Furthermore, the outward investment promotion effect of cross-border e-commerce pilot zones is more pronounced in samples where the destination is a developed country, the target industry is high-tech, and the origin is eastern China. This study not only expands the dimensions for assessing the economic effects of cross-border e-commerce but also provides concrete empirical evidence for governments to optimize digital trade policy arrangements and for enterprises to leverage digital tools to overcome the “Liability of Foreignness” and achieve internationalization.