Global convergence and local divergence in e-Commerce: Cross-Country analyses

The Internet and e-commerce are recent examples of ongoing information technology innovations credited with driving the productivity revival of the past decade. Established firms such as Dell, Cisco, General Electric, IBM, and Wal-Mart, along with firms “born on the Internet,” such as Amazon and eBay, have shown the potential of IT and e-commerce to enhance customer services, streamline internal operations, and improve B2B coordination. Today, Internet use is almost universal among firms in the industrialized countries, and is growing rapidly in the developing world as well. Thus, there is global convergence in the continuing trend toward e-commerce diffusion. Yet, technology diffusion is rarely a smooth and linear process. Many firms fail to achieve deep usage beyond initial adoption. Prior studies show that an e-commerce innovation must be integrated into a firm’s value chain before it can generate significant business value. Ecommerce integration encompasses using the Internet for selling, buying, and coordinating both internal and external business processes. We would expect firms that are more advanced – that integrate the Internet most extensively – would reap the greatest benefits. And because firms in developed and developing countries may be at different stages of the diffusion process, we would expect there to be divergence in the relative importance of the factors that influence each stage. Indeed, as with the earlier chapters in this book, we find that there is both global convergence and local divergence in e-commerce diffusion.