Academic journal article Journal of Theoretical and Applied Electronic Commerce Research

Factors Influencing the Evolution of Electronic Commerce: An Empirical Analysis in a Developed Market Economy

Academic journal article Journal of Theoretical and Applied Electronic Commerce Research

Factors Influencing the Evolution of Electronic Commerce: An Empirical Analysis in a Developed Market Economy

Article excerpt

Abstract

This paper tries to explain the temporal evolution of electronic commerce in a developed country. For this purpose, we evaluate the contribution of the size of the potential market represented by the community of Internet users to the development of electronic commerce, as well as of other determinant factors. The validation carried out, for the whole Spanish market and over a period of seven years, reveals the existence of a critical threshold of online consumers that, once surpassed, supposes a change in the growth trend of electronic commerce. Likewise, we verify that broadband technology diffusion, the definition of a legal framework of consumer protection, and the design of a value proposition perceived as "secure", also influence the development of electronic commerce. We also confirm the contribution of firms' differentiation strategies to the development of electronic commerce, to the detriment of those based on price leadership. Finally, it seems that possession of a computer is no longer an indicator of access barriers.

Key words: Electronic commerce, Adoption, Development, Determinants, Evolution, Internet, Spain

1 Introduction

Since the Internet began to be used in business, both practitioners and academics have been interested in identifying the factors affecting the activities of e-commerce, and understanding how they affect its development or the extent of its use. At present, it is still important to study the e-commerce phenomenon, since it is continuously evolving [11], and generalizable evidence is still lacking.

As a whole, the empirical work undertaken since the mid-1990s, particularly for advanced economies, has identified a large and varied number of determinants of Internet and e-commerce adoption and development (factors to do with the competitive environment, technological and organizational factors, etc.), which has led some authors (such as Fillis et al. [21], and Kim and Galliers [33]) to review them. However, more empirical work is needed to test the choice of these determinants.

Moreover, it is also desirable that the identification and analysis of the determinants of e-commerce take into account the particular characteristics of the competitive environment of each economy or market. The specific determinants affecting e-commerce may be very different depending on the type of competitive environment involved [44]. In fact, specific analyses are required that consider the particular features of e-commerce for the end-consumer markets. Although the potential for development of this type of initiative is extraordinary, particularly in advanced economies, where the majority of consumers has substantial purchasing power and possesses the minimum technological equipment necessary to connect to the Internet, limitations still exist, and these should be identified and analyzed.

At the same time, the study should be longitudinal -contemplating the temporal evolution of the phenomenon- rather than cross-sectional.

With the aim of accomplishing these research objectives, we have defined a holistic and theoretically constructed model that identifies factors from the competitive environment (of a developed country) and the firm's value proposition that might affect the evolution of the B2C e-commerce phenomenon over time.

We have structured the present work in five sections, including this short introduction. In Section 2 we review the literature on the adoption and development of e-commerce, and then propose an explanatory model. This will be the starting-point for identifying the variables and obtaining the data to be used to test the previously-defined model, which we undertake in Section 3. Then, in Section 4, we present the results obtained. First, we study the dynamics of the phenomenon under analysis, comparing this with one of its most important determinants: the size of the potential market represented by the community of Internet users. …

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