The increasing share of low-value transactions in international trade

TL;DR

This paper analyzes the significant rise in low-value international trade transactions, driven by e-commerce and fast-fashion, highlighting a shift in trade composition over recent decades.

Contribution

It provides empirical evidence of the increasing share of low-value transactions in international trade, using Spanish data from 1997 to 2023.

Findings

Low-value transactions increased from 9% to 61% in exports

Low-value transactions increased from 14% to 54% in imports

E-commerce and fast-fashion are key drivers

Abstract

This paper documents a new feature of international trade: the increase in the share of low-value transactions in the total volume of transactions. Using Spanish data, we show that the share of low-value transactions in the total number of transactions increased from 9% to 61% in exports and from 14% to 54% in imports between 1997 and 2023. The increase in the number of low-value trade transactions is explained by the rise of e-commerce and direct-to-customer sales facilitated by online retail platforms, and the fast-fashion strategy followed by clothing firms.