The Diffusion of E-commerce in Developing Economies

The Diffusion of E-commerce in Developing Economies

A Resource-based Approach

Zeinab Karake Shalhoub and Sheikha Lubna Al Qasimi

The authors of this unique volume provide a timely and valuable perspective on how technology and the Internet revolution are changing business and spurring development across the world, especially in emerging countries. Utilizing a framework grounded in rigorous theory, they provide a fine-grained understanding of electronic commerce adoption processes by public and private sector entities in developing countries. In so doing, they consider how each exchange encounter is shaped by, and in turn shapes, relational characteristics that form the basis for growth and development.

Chapter 4: Methodology and Development of Hypotheses

Zeinab Karake Shalhoub and Sheikha Lubna Al Qasimi

Subjects: business and management, international business, development studies, development economics, economics and finance, development economics, international business, international economics

Extract

INTRODUCTION The resource-based view (RBV) of the firm argues that the performance of an economic entity is, inter alia, a function of the resources and skills that are in place, and, of those economic entity-specific characteristics which are rare and difficult to imitate or substitute. This concept is in essence based on Coase’s theory of the firm which maintains that the firm is a combination of alliances that have linked themselves in such a way as to reduce the cost of producing goods and services for delivery to the marketplace (Coase, 1937). An enhancement of this RBV is that an economy can create a competitive advantage by building resources that work together to generate organizational and country-based capabilities (Bharadwaj, 2000). These capabilities permit economic entities and economies as a whole to adopt and adapt processes that enable them to realize a greater level of output from a given input or, maintain their level of output from a lower quantity of input. In this chapter we will develop a set of hypotheses with the objective of conducting a systematic cross-country analysis of electronic commerce (e-commerce) and electronic government (e-government) activities in a sample of developing and emerging economies. The overall premise, and based on resource-based theory, is that in addition to the physical infrastructure which explains much of the variation in basic Internet use and country electronic readiness, e-commerce and e-government activities also depend significantly on a supportive institutional environment such as national respect for the ‘rule of...

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