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ABSTRACT
To better understand the development of e-commerce across countries we utilize competing theories to examine information and communication technology (ICT) adoption, a critical foundation of global e-commerce. On the one hand, economic institutional theory predicts that strong national institutions will engender trust and thus foster arms length business transactions in a society, such as those conducted using ICT. On the other hand, entrepreneurship theory suggests that new business creation is a main driver of ICT adoption. Drawing on a sample of 80 countries, we find strong support for the institutional argument and weak support for the entrepreneurship view. Our findings further indicate that institutional quality is especially critical in developing countries where it is an important driver for both the basic and more advanced technologies that underpin e-commerce. Implications for theory and public policy are discussed.
Key words: information, communication, and technology (ICT), e-commerce, entrepreneurship, institutions, institutional quality
1. Introduction
Confidence in the economic system is a very important element in today.s modern business context. This is especially true for e-business where value is created through impersonal, arms-length transactions [Amit and Zott, 2001]. The Internet supports virtual markets through various mechanisms, including high connectivity, a focus on transactions, importance of information goods and services, and high reach and richness of information [Amit and Zott, 2001]. Others have pointed to physical infrastructure as a key determinant of Internet use [Oxley and Yeung, 2001]. Physical infrastructure studies highlight differences in the ways in which core technologies such as telephone networks are accepted and used by consumers and organizations in various countries [e.g., Meso Musa, and Mbarika, 2005; Chan and Ngai, 2007]. Without the trust and acceptance (and consequent use) of an underlying infrastructure and Internet application layer, e-commerce is not possible.
In the current study, we examine the antecedents of e-commerce in terms of Information and Communication Technology (ICT) adoption. Global e-commerce and ICT adoption have been put under empirical scrutiny by previous scholars who have examined their determinants with regard to cultural differences across countries [Erumban and de Jong, 2006; Zhao, Kim, Suh, and Du, 2008] and institutional differences [Oxley and Yeung, 2001]. Other scholarly inquiry has focused on the issue of the global digital divide, that is, the gap between rich and poor...