Determinants of the Global Diffusion of B2B E-commerce

Abstract

Compared to business-to-consumer (B2C) e-commerce, business-to-business (B2B) e-commerce is larger, growing faster and has less unequal geographical distribution globally. In this paper, we examine the current stage of B2B e-commerce development across four global regions and propose a model to explain the magnitude and global distribution of B2B e-commerce activities. Our analysis indicates that increases in the freedom of the movements of goods, services, capital, technology and people coupled with rapid technological development resulted in an explosion of global B2B e-commerce. The share of the global B2B e-commerce a country is likely to receive, on the other hand, depends upon country level factors such as income and population size, the availability of credit, venture capital, and telecom and logistical infrastructure, tax and other incentives, tariff/non-tariff barriers, government emphasis on the development of human capital, regulations to influence firms’ investment in REED, organizational level politics, language and the activities of international agencies.