The costs of exporting, barriers to trade, and the lack of knowledge of foreign markets keep most firms focused only on the domestic marketplace. However, with over 95 percent of the world’s consumers outside our borders, accessing the global marketplace offers opportunities for better firm performance. Digital platforms have been a game changer for buyers and sellers, and women have taken advantage of these technological developments.
Firms that export and or import tend to have higher wages, higher revenue growth, longer survivability rates, and better benefits. Yet, overall, only 2.7 percent of employer firms export, and only 1.7 percent of women-owned employer firms export. (Employer firms are firms that have employees as opposed to one-person firms.)
Being a retailer in today’s economy no longer requires capital-intensive shopfronts or face-to-face interactions. Buyers and sellers can find each other online, and digital platforms can decrease the cost of doing business across borders. Etsy, an online retailer, reports that 97 percent of its sellers run their Etsy shops from their homes and that 80 percent are women.
Between the first quarter of 2015 and 2020 (before the global COVID-19 pandemic), Etsy added approximately 50,000 to 100,000 new active sellers each quarter. Between 2020 and 2021, the number of new active sellers rose to 500,000 to 700,000 per quarter. This occurred while more women than men were dropping out of the labor force to care for children and family members as schools closed during the pandemic.
American women aren’t the only ones taking advantage of digital platforms. Forty-five percent of Etsy’s gross merchandise sales volume is international. The World Bank reports that digital technologies and online platforms are creating economic opportunities for women in developing countries.
Women are also taking advantage of innovative fintech. PayPal Public Policy Lab reported that 79 percent of all small businesses that use PayPal (a fintech payment method for the digital marketplace) engage in exporting and that nearly 3 out of every 4 women-owned businesses that use PayPal export their goods and services. They also report that the growth rate for women-owned exporting businesses was nearly equivalent to men-owned exporting businesses. In other words, digital platforms and fintechs are helping to close the gender gap in exporting and firm performance.
Even on Facebook Marketplace, a platform known for its strong local presence, the propensity to export is higher than national figures for both men- and women-owned businesses. Survey data by Facebook, the Organisation for Economic Co-operation and Development, and the World Bank, covering the United States and 41 other countries, showed that firms on the platform exhibited a higher propensity to export than firms in general for every firm size category (except the largest firms) and every industry category. The propensity to export on Facebook Marketplace was higher than that of the general population regardless of the gender of the business owner.
Empirical evidence on the economic effects of digital platforms is still frustratingly scarce. However, existing data points are consistent with the notion that digital platforms have helped to close the exporting gap between men- and women-owned businesses. This is partly linked to how digital platforms and fintech facilitate the transparency of buyer and seller information, trusted payment methods, and other networking and administrative support.