An Economic Framework for the Assessment of E-Commerce in Developing Countries

An Economic Framework for the Assessment of E-Commerce in Developing Countries

Ayoub Yousefi (King’s University College at the University of Western Ontario, Canada)
Copyright: © 2009 |Pages: 16
DOI: 10.4018/978-1-60566-100-1.ch012
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Abstract

This study presents a theoretically-based model for economic analysis of electronic commerce in developing countries. The Porter diamond model is adopted for proper economic examination of the factors that affect e-commerce. The model not only captures the factors as the driving forces of e-commerce, but also facilitates the assessment of e-commerce and identification of the global competitive advantages of the firms. The new model can be used as a framework for better policymaking by the public and private sectors and to predict changes in the rapidly expanding e-commerce in the global environment, especially in developing countries.
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Literature Review

E-commerce literature has been growing rapidly in a number of interrelated dimensions by covering, primarily, business-related topics in relation to ICTs (the wired and wireless networks), and the Internet (2). The relatively recent body of literature on e-commerce identifies a wide range of factors encompassing numerous socioeconomic, cultural, and institutional factors affecting operations and the progress of e-commerce around the world. Sherif (2006) presents a recent comprehensive survey of the status of a number of developing countries in relation to various aspects of e-commerce such as strategies, challenges, and opportunities. Clearly, these conditions appear to vary substantially from one nation to another and across firms depending on the industry structure, state of the technology, and geographic locale.

International trade has long been viewed to enlarge trading nations’ production and consumption capacities and provide access to scarce resources without which poor nations would be unable to grow. In addition, the continued expansion of trade is expected to equalize returns to factor prices between nations, promote greater international equality and, in the long run, bring about economic growth. The emergence of the so-called digital opportunities and specifically the e-commerce has altered the landscape of this debate and led some to believe that the gap between poor and rich countries might shrink at an even faster pace than before as developing countries gain access to these technologies. However, there are those who hold an opposing view on this matter. Ferran and Salim (2006), for instance, argue that such equalization tendencies are far from happening as deficiencies in business practices caused by inadequate transportation, organizational, and payment infrastructures overwhelm the sole importation and installation of physical ICT capital. Similar concern has been raised by Mansell (2001), which examines the claim that using ICTs and particularly the Internet will facilitate success of firms in developing countries in international markets. The study concludes that unfavorable institutional setting and the lack of ICT-related skilled labor force hinder the success of e-commerce and long-term economic growth for most developing countries.

The literatures of the Internet and e-commerce are both integral parts of a broader body of ICTs literature. It is interesting to observe that researchers from different disciplines, even non-economists, are showing an increasing interest in understanding the economic foundations of ICTs in an attempt to answer questions concerning costs and benefits of ICTs. Bakos and Kemerer (1992) review six areas of economic theory that have been identified as a reference discipline for the systematic analysis of ICTs. McKnight and Bailey (1997) focus more closely on pricing models for the Internet, which is operational and economically efficient. The study also reminds the industry leaders, academics, and policymakers of the lack of a proper economic framework of the Internet services and the policy assessment of the Internet. In particular, the study invites scholars of technology, economics, and policymakers to cooperate in an interdisciplinary study of the Internet economics.

Studies by Tapscott (1996) and Harbhajan and Varinder (2005) attempt to explain the way digital economy operates. That is, how in the new economy enterprises organize their activities and how they are linked to one another. Shapiro and Varian (1999) focus on information economy and elaborate on the pricing of information goods, which tend to have zero marginal cost. Similarly, Liebowitz (2002) examines the network economy especially the basic Internet economics. Finally, Kauffman and Walden (2001) offer a comprehensive review of a broad-based literature on e-commerce from the perspective of a multi discipline research and a multilevel framework for conceptual analysis.

Complete Chapter List

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List of Reviewers
Table of Contents
Foreword
Omar A. El Sawy
Acknowledgment
Chapter 1
Richard Boateng, Alemayehu Molla, Richard Heeks
This chapter undertakes a meta-analysis of the published literature on e-commerce in developing economies (DEs). The aim is to take stock of the... Sample PDF
E-Commerce in Developing Economies: A Review of Theoretical Frameworks and Approaches
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Chapter 2
Reinhold Decker
This chapter outlines and discusses current empirical findings and conceptual ideas concerning the status quo and future prospects of e-commerce in... Sample PDF
Significance and Success Factors of E-Commerce in China and Russia: An Empirical View
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Chapter 3
Sushil K. Sharma, Jatinder N.D. Gupta
The past few years have seen a rise in the number of companies’ embracing e-commerce technologies in developing countries and the volume of... Sample PDF
Identifying Factors for Lack of E-Commerce in Developing Countries
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Chapter 4
Antonis C. Stylianou, Stephanie S. Robbins, Pamela Jackson
It is widely recognized that e-commerce represents a critical resource for most business organizations. With over 1.3 billion people and... Sample PDF
E-Commerce Development in China: An Exploration of Perceptions and Attitudes
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Chapter 5
Mahesha Kapurubandara
Acceptance of the Internet has paved the way towards the development of virtual communities that keep increasing in the current information society... Sample PDF
E-Commerce Adoption and Appropriation by SMEs in Sri Lanka
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Chapter 6
Alev M. Efendioglu
The number of Internet users around the world has been steadily growing and this growth has provided the impetus and the opportunities for global... Sample PDF
E-Commerce in Developing Countries: Impediments and Opportunities
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Chapter 7
Victor van Reijswoud, Arjan de Jager
E-governance is a powerful tool for bringing about change to government processes in the developing world. It operates at the crossroads between... Sample PDF
E-Governance in Uganda: Experiences and Lessons Learned from the DistrictNet Programme
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Chapter 8
Abdelbaset Rabaiah
This chapter illustrates the impact of electronic government (e-government) on electronic commerce (e-commerce) development and implementation in... Sample PDF
E-Government and Its Impact on E-Commerce in LDCs
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Chapter 9
Zakariya Belkhamza
Global deployment in information and communication technology requires understandings of the cultural constraints in technology acceptance and usage... Sample PDF
Cultural Interpretation of E-Commerce Acceptance in Developing Countries: Empirical Evidence from Malaysia and Algeria
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Chapter 10
Ahu Genis-Gruber
E-commerce has been a widely used mean to purchase goods and services all over the world. This study investigates the role of cultural differences... Sample PDF
Cultural Differences, Information Technology Infrastructure, and E-Commerce Behavior: Implications for Developing Countries
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Chapter 11
Kamel Rouibah
With the widespread use of mobile phones in the Arab world, companies, including banks, are offering different communication channels for their... Sample PDF
Mobile-Commerce Intention to Use via SMS: The Case of Kuwait
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Chapter 12
Ayoub Yousefi
This study presents a theoretically-based model for economic analysis of electronic commerce in developing countries. The Porter diamond model is... Sample PDF
An Economic Framework for the Assessment of E-Commerce in Developing Countries
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Chapter 13
Lena Aggestam
B2B development has been faster in the developed world comparing to developing countries. This chapter proposes a “tool” for managing CSF in B2B... Sample PDF
Guidelines for Preparing Organizations in Developing Countries for Standards-Based B2B
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Chapter 14
Dimitrios Xanthidis, David Nicholas, Paris Argyrides
This chapter is the result of a two years effort to design a template aiming at standardizing, as much as such a task is feasible, the evaluation of... Sample PDF
A Proposed Template for the Evaluation of Web Design Strategies
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Chapter 15
Jameleddine Ziadi, Abderrazzak Ben Salah
This chapter has as an aim the identification of the present reality of the e-commerce activity in Tunisia and the challenges its faces. After... Sample PDF
Electronic Commerce Reality in Tunisia
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Chapter 16
Hongxiu Li
This chapter introduces the four sets of prerequisites for successful electronic commerce (e-commerce) development, including national factors... Sample PDF
Electronic Commerce in China: Can We Wake Up the Giant?
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Chapter 17
Sherif Kamel
Emerging information and communication technology is driving transformation and change in the cyberspace. Speed, competition and globalization are... Sample PDF
Evolution of Electronic Procurement in Egypt: Case of Speedsend.com
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Chapter 18
Borislav Jošanov, Marijana Vidas-Bubanja, Emilija Vuksanovic, Ejub Kajan, Bob Travica
The authors of this chapter constructed and published multidimensional model for the evaluation of e-commerce diffusion in any country. According to... Sample PDF
The State and Development of E-Commerce in Serbia
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About the Contributors