Does This Site Deliver? B2B E-Commerce Services for Developing Countries

Abstract

The potential of public Internet-based B2B (business-to-business) e-commerce applications to facilitate access to global markets and to reduce market entry barriers is a dominant theme in the burgeoning literature on e-commerce and international development. It is often assumed that these applications will enable producer firms in developing countries to benefit from reductions in the transaction costs they must incur to participate in international trade. Drawing on data from a detailed analysis of 117 B2B e-hubs in the garments/apparel and agriculture/horticulture sectors, it is argued in this article that the kinds of transaction-related support services available at these online trading platforms are more limited in their scope and functionality than is often assumed in the literature on B2B e-commerce development. The findings suggest that the mere application of, and access to, technologies such as the public Internet and the World Wide Web is not likely to enable a reduction in overall transaction costs that is sufficient to facilitate entry into new global markets by developing country producer firms.