Explaining e-commerce adoption at country level

Abstract

The objective of this paper was to explain the economic determinants of e-commerce adoption at the country level. This study aimed to expand the empirical literature on the relationship between e-commerce, broadband penetration, and regulatory framework. We estimated a structural equation model mainly composed of three interrelated and endogenous ICT demand functions (e-commerce, mobile broadband, and fixed broadband), which depend on ICT price, income, digital skills, and regulatory framework as exogenous variables. In this paper, official data from international institutions for the year 2018 was used. Results obtained show that income is a significant factor of mobile and fixed broadband penetrations, and indirectly, of e-commerce adoption. Hence, high-income countries are more likely to do e-commerce, as they will have a higher broadband penetration. While broadband penetration becomes a moderator variable, regulatory framework turns into a mediator variable as it determines, both directly and indirectly, e-commerce adoption. Lastly, there seems not to be a price effect on e-commerce adoption.