Antecedents of Electronic Commerce in Developing Economies

Antecedents of Electronic Commerce in Developing Economies

Ismail Sila (Near East University, Nicosia, Cyprus)
Copyright: © 2019 |Pages: 27
DOI: 10.4018/JGIM.2019010104

Abstract

One of the objectives of this article is to investigate the extent to which several factors that might affect electronic commerce (EC) usage are implemented and EC is used in a developing country. The article also aims to identify the factors that actually influence the use of EC in a developing country context. The author used annual survey data obtained over a 5-year period from 2009 to 2013 to test several hypotheses. This is probably the first article to assess the changes in these factors' effects on firms' usage of EC over several years. Findings suggest that there are major gaps in the implementation of these factors. There were no major changes or developments in technology availability and EC infrastructure over the five-year period. In fact, there was a general deterioration in the other factors that could facilitate EC usage. In addition, there were no changes in the extent to which EC was used over the same period. Implications of these findings for managers and researchers are discussed.
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Introduction

The new century has seen a revolutionary change in the way business and trade are conducted over electronic channels. Users in least-developed and developing countries are increasingly accessing the Internet via terminals and mobile devices. The use of the Internet and mobile applications are expected to increase exponentially in the future. This provides great opportunities to utilize the power of the Internet and other forms of information and communication technology (ICT) to advance the social and economic development of developing countries around the world. Despite evidence of productivity gains in several areas, companies in developing countries are not always maximizing the use of these technologies (World Trade Organization, 2013). Developing countries should fully embrace EC to realize several important benefits, including improved economic and social development, increase in productivity, reduction in operating costs for businesses, and integration of their economies with the international markets (Alyoubi, 2015; World Trade Organization, 2013). In fact, such gains are already being evidenced in some countries such as India (Turban, King, Lee, Liang, & Turban, 2015).

Even though EC has the potential to provide greater benefits to businesses and consumers in developing countries than in developed countries, this potential has not been fulfilled in many of these countries (Kshetri, 2007; Molla & Heeks, 2007; World Trade Organization, 2013). Several factors have been cited for the developing countries’ failure to reap these benefits, including financial, legal, and physical infrastructure barriers to implementation (Kshetri, 2007; Tan, Tyler, & Manica, 2007; Abou-Shouk, Megicks, & Lim, 2013), as well as factors such as management attitudes and culture (Abou-Shouk et al., 2013).

Most of the literature on the adoption and use of EC consists of studies conducted in developed countries such as the US, Europe, and Scandinavia. The findings of these studies are not necessarily applicable to developing economies, since the factors driving the adoption of EC and the barriers to adoption differ across countries (Kartiwi & MacGregor, 2007). Previous studies on EC in developing countries have mainly been conducted in Latin America, Asia, and Africa. However, there is still a lack of systematic research on issues related to the e-readiness of small and medium-sized enterprises (SMEs) in developing countries (Fathian, Akhavan, & Hoorali, 2008; Huy, Rowe, Truex, & Huynh, 2012; Abou-Shouk et al., 2013). Such research on small island economies has been particularly missing from the literature (Molla, Taylor, & Licker, 2006). Therefore, the objectives of this study are:

  • To investigate the extent to which several factors that might affect EC usage are implemented and EC is used in a developing country. The author does this by analyzing annual survey data obtained from firms in Northern Cyprus (NC) between 2009 and 2013. The analysis of yearly data allows researchers to detect developments or changes in the characteristics of the target population. To the author’s knowledge, this is the first study in this area that used more than one year’s data on factors related to the use of EC and EC usage.

  • To determine the factors that actually influence the use of EC in a developing country over a 5-year period.

  • To make policy and research recommendations based on the study’s findings.

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