E-Commerce Policy and International Business.

VerfasserCumming, Douglas

1 Introduction

Over the past two decades, e-commerce has significantly changed the landscape of innovative business models and activities across the globe. Fueled by emerging technologies such as artificial intelligence, the Internet of Things (IoTs), and big data, e-commerce activities are on the rise, creating significant opportunities for both small and large firms to operate and provide products and services on a global scale (cf. McKinsey, 2021). In 2019, the global cross-border e-commerce market was estimated to be worth around US$780 billion and is expected to reach around US$4,820 billion by 2026 (cf. AP News, 2020). Similarly, other estimates indicate that around 9.3 billion cross-border e-commerce orders were placed in 2020, compared to 3.2 billion in 2015 (e.g., McKinsey 2022). This shows the growing importance and rise of cross-border e-commerce activities, which offers important opportunities to both small and large firms to scale up their cross-border e-commerce business models.

Changing consumer behaviors and buying patterns, favorable regulatory environments, and a growing trend of digitalization are playing a significant role in the development of global online markets. Several countries have also enacted regulations aimed at supporting the development of online infrastructure: for instance, the EU digital single market (European Parliament, 2020) and China's Belt and Road initiative have provided important opportunities for businesses to interact with their customers online (cf. Yang et al., 2017). This suggests that there is a huge potential for both small and medium-sized enterprises (SMEs) and large multinational ones (MNEs) to conduct their business activities through online channels (cf. Ojala et al., 2018; Tolstoy et al., 2021). Such growth has been further amplified by the rapid spread of COVID-19 pandemic, which has impacted and dramatically changed social and economic activities on a global scale. Many governments around the world took unprecedented strict measures to contain the spread of the virus, including the imposition of lockdowns, social distancing, and border closures (cf. Dorrenbacher et al., 2021). These adversely affected economic activities, severely damaging many brick and mortar businesses, several of which, including both large and small firms, even went bankrupt and failed (cf. Amankwah-Amoah et al., 2021a). Besides social activities, those measures had a profound impact on international business activities, including global e-commerce (e.g., Mena et al., 2022: McKinsey, 2021).

The COVID-19 pandemic also accelerated the pace of digitalization and the adoption of emerging technologies in all spheres of life, changing our buying patterns and causing many brick and mortar stores to shift from offline to online business models (cf. Amankwah-Amoah et al., 2021b). In essence, we are witnessing the rise of digital globalization, whereby digital capabilities and business models are taking on a more prominent role in the global economy (cf. Luo, 2022). In such a context, McKinsey (2021) noted that COVID-19 has amplified e-commerce related activities, which were instrumental in surviving the challenges of the pandemic and will remain pivotal in the new normal. However, the growth of e-commerce is not uniform across the globe, as the internet penetration rate is quite uneven, especially across many developing and late liberalizing economies; this hinders firms from participating in e-commerce activities (cf. Zhu & Thatcher, 2010). Much e-commerce activity is now taking place in a number of emerging markets--such as China and India--potentially providing important opportunities for firms to locate their value chain activities. Yet, the location whence the virus originated and spread may have adversely affected the locational advantages of countries, potentially forcing firms to shift to other locations in order to mitigate the prolonged impact of the crisis on their business activities. Such issues deserve greater attention from international business (IB) scholars interested in understanding the fine-slicing of MNE value chain activities and the impact of locational advantage on e-commerce growth.

Extant studies have examined e-commerce strategy; i.e., the barriers challenges related to the adoption of e-commerce (cf. Agarwal & Wu, 2015 for an overview). Within the IB field, one stream of research applies Dunning's OLI paradigm to explain the rise of e-commerce firms (cf. Singh & Kundu, 2002). Recent IB scholarship has focused on examining the rise of platform-based firms and has highlighted the importance of both direct and indirect networks effects in explaining their internationalization and cross-border activities (e.g., Brouthers et al., 2016; Chen et al., 2019; Zeng et al., 2019). The rise of e-platforms has been noted for being crucial to facilitate exports from emerging markets in relation to lessening the role played by information intermediaries (e.g., Jean et al., 2021). Despite the contributions made by the extant literature, limited discussions have been conducted around e-commerce-related policy and on how it affects international business activities and the global value chain configurations of MNEs. The key aim of this focused issue was to solicit contributions at the intersection of the international business, public policy, and legal aspects of e-commerce. This introductory article as well as the articles that are part of this focused issue provide useful insights on e-commerce policy and international business. Below, we briefly discuss e-commerce policy and international business, and then some of the key enabling factors that are facilitating the growth of cross-border e-commerce. Next, we explore the constraining factors, and key theories that can be utilized to study cross-border e-commerce. as well as the articles which are part of this focused issue.

2 E-commerce Policy and International Business

The 18th century's economic geography was affected by the cost of transporting raw materials to local production locations, where they could be processed to make end products. The primary challenge of home production was that the greatest amount of the capital remained idle for most of the time (cf. Learner et al., 1999). In the 19th century, the impact of mechanization on manufacturing and the deeper division of labor brought about improvements in transportation systems--canals, roads, railways, and fast ships (Robinson & Wahl, 1990). Over the 20th century, further improvements in transportation and communication caused a greater geographical fragmentation of production (cf. Arndt & Kierzkowski, 2001). Businesses outsource many of their specialist activities to specialized firms, thus producing intermediate intellectual inputs. Also, the international distribution of value-added activities is encouraged, matching the relative competitive advantage of each geographic location. These business revolutions are observed mainly due to the acceleration of the information and communication technology (ICT) transformation that connects firms, suppliers, and consumers in seamless webs; as such, this new connectivity is playing a vital role in facilitating business activities across the globe (e.g., Luo 2022).

In particular, over the last decade, e-commerce has become an indispensable part of the global economy, as the advent of the internet has substantially transformed the world. During recent years, this has attracted significant attention from IB scholars (see Table 1). The digitalization of modern life has enabled consumers to virtually benefit from online transactions. As access to and the adoption of the Internet is growing globally, the number of digital buyers keeps rising yearly. According to Statista (2020), over two billion people purchase goods and services online and e-retail sales have surpassed US$4.2 trillion worldwide. This upsurge in online consumers was observed during the COVID19 pandemic, as online shopping became almost a necessity due to the restrictions and lockdowns imposed by governments across the globe (McKinsey, 2021). Also, the availability of e-commerce platforms, marketplaces, and digital solutions has enabled different types of firms to navigate and pursue opportunities in international business environments (Schu et al., 2016). The usage of the Internet enables firms to acquire and interpret external knowledge, thereby gaining cheaper access to a wide variety of foreign markets (cf. Tolstoy et al., 2021). For instance, Farfetch and Asos, as well as many other similar firms are utilizing e-commerce business models and rapidly expanding into foreign markets. Some of these firms (e.g., Zalando) have initially expanded into close proximate markets (cf. Swoboda & Sinning, 2022). This suggests that e-commerce firms also face significant institutional challenges stemming from the policy and contextual differences found across different markets.

To understand how the field has progressed, we also conducted a keyword search on articles published in major IB journals between 1999 and May 2022. We selected this time period because, during the last two decades, interest in e-commerce adoption and growth has risen across the globe. Table 1 provides an overview of the number of articles published in leading IB journals.

To further understand how the international e-commerce policy field has progressed relative to the more general IB one, we carried out searches on Google Scholar by year from 1999 to May 2022. The results are shown in Fig. 1, which takes as its benchmark the year 2010= 100. We noted that, in 2010, there were 1,280, 40,200, 13,700, and 22,900 hits for the search terms "e-commerce" "policy", "international business", and "international business" "policy", respectively. The graph presents some noteworthy findings. First, it shows that IB policy and, more generally, IB are topic areas that have exhibited very similar...

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