A Growth-Theoretic Empirical Analysis of Simultaneity in Cross-National E-Commerce Development

The emergence of information and communication technologies infrastructure has transformed the global economy. The development of information technology infrastructure is limited to some developed countries though. This research explores the role of information technology infrastructure in B2C e-commerce growth at the country-level from the perspective of growth theory in economics. We propose a hybrid exogenous and endogenous growth model to explain e-commerce growth. We estimate a panel data model that incorporates the direct effects of e-commerce infrastructure and other key explanatory variables. We further specify a simultaneous effects model that permits the analysis of reverse causality in the association between e-commerce growth and Internet-based selling technology adoption. The data include 24 countries in four different regions around the world. We found that endogenous factors (online payment availability, and Internet-based selling technology adoption) and exogenous factors (international openness) both contribute to B2C e-commerce growth in a country. We also found that there is a two-way interaction between Internet-based selling technology adoption and e-commerce growth. The empirical findings support the effectiveness of our theoretical approach.