E-commerce Policy and the Global Economy: A Path to More Inclusive Development?

VerfasserAhi, Alan A.

1 Introduction

The advancement of digitalization is increasingly shaping the way firms conduct business within and across borders (Manyika et al. 2016; Katsikeas et al. 2019; Kraus et al. 2019). Examples include the use of digital technologies to aid their internationalization, enhance their productivity, transform existing or create new business models, and improve interactions with and among consumers (Bouncken and Barwinski 2020; Katsikeas et al. 2019; Sinkovics et al. 2013). Therefore, depending on the nature of the industry, firms can use digital technologies to take advantage of new entrepreneurial opportunities (Kraus et al. 2019; Meltzer 2019) and/or link into global value chains (cf. Bouncken and Barwinski 2020; Sinkovics et al. 2019).

Although digitalization is a broad concept and has many facets (cf. Bouncken and Barwinski 2020; Ritter and Pedersen 2020), electronic commerce (E-commerce) is an important example of how businesses can take advantage of digital technologies. E-commerce may be defined as "the sale or purchase of goods or services conducted over computer networks by methods specifically designed for the purpose of receiving or placing orders" (OECD 2019a, 2019b, 2019c, p.14). (1) The benefits of E-commerce adoption in a cross-border space--depending on the nature of the product--include the possibility to enter international markets without costly investments in physical facilities abroad (Kraemer et al. 2006; Pezderka and Sinkovics 2011), rapid response to demand conditions, and a more cost-effective personalization of offerings to customers worldwide (Gregory et al. 2017; Katsikeas et al. 2019; Kraemer et al. 2006). Because of these potential benefits, E-commerce has become a widespread business phenomenon gradually transforming the traditional business landscape (OECD 2019c). It has penetrated nearly all aspects of socio-economic relations, and concomitantly, has brought potential disruptions to the fundamental structure of how global trade is carried out and regulated (Neeraj 2019).

However, despite its benefits, cross-border E-commerce remains subject to many trade barriers (Gessner and Snodgrass 2015; Gomez-Herrera et al. 2014) and is not devoid of risk (Pezderka and Sinkovics 2010, 2011). For example, data protection and privacy issues are frequently of concern; yet, regulations to alleviate these concerns are still a work in progress (Meltzer 2019; Wolfe 2019). Other challenges in the international E-commerce space can include customs delays, ambiguous return processes, insufficient transparency on delivery and pricing, and a limited ability to change delivery times and locations (Gomez-Herrera et al. 2014; UNCTAD 2015). Further, cross-border E-commerce may expose firms to various political, legal, and security risks (Grant et al. 2014; Jean et al. 2020; Pezderka and Sinkovics 2011). As a result, not all firms have equal opportunities to engage in E-commerce. Evidence shows that small and medium-sized enterprises (SMEs) lag behind larger firms in adopting E-commerce (OECD 2019c). In addition, there is a major gap between developed and less-developed countries in E-commerce adoption (OECD/WTO 2017).

Many of these risks and gaps originate from underdeveloped formal institutions (Doh et al. 2017; Jean et al. 2020). Especially important in this context is the existence of laws and regulations and the quality of their enforcement (cf. Clegg 2019). Formal institutions are subject to change via public policy developed by the government or its agencies (Clegg 2019). Appropriate government policies generally lead to transparent institutions that can support E-commerce activities and lower the risks of partaking in them (OECD 2019c). In contrast, weak policies underpinned by inefficient legal and regulatory enforcement can hamper economic activity (Doh et al. 2017; Sheng et al. 2011), and augment the risks associated with E-commerce (Jean et al. 2020). As a consequence, many governments have recognized the importance of policy frameworks as a driver of E-commerce participation (UN 2019), as is reflected by E-commerce becoming a top priority for policy-makers at the national, regional and global level since the mid-1990s (OECD 2019c).

However, there remains large variation in E-commerce policies across countries (Fefer 2020). The world regulatory governance system has been slow to adjust its multilateral rule architecture to these modern business realities (Janow and Mavroidis 2019). At the same time, there is a paucity of academic research on public policy related to cross-border E-commerce, with the majority of existing studies adopting a firm perspective. However, digital transformation is not driven only by private decision-making; the role of government policy plays a pivotal role in this process (cf. Clegg 2019).

To this end, this study aims to take stock of the existing knowledge on E-commerce policy scattered across the academic and policy domains. Going beyond the analysis of academic publications is necessary as they are few in number and relatively dated. Therefore, to close the knowledge gap on E-commerce policy in academic publications, we extend the analysis to documents published by international bodies such as the World Trade Organization (WTO) and the Organisation for Economic Co-operation and Development (OECD). We conclude the study by suggesting four areas for future research, with the intention of bringing greater focus to E-commerce policy matters in international business research.

2 Types of E-commerce

Through E-commerce, a range of commercial relationships can occur, involving any possible pairing of consumers, businesses or governments (Laudon and Traver 2018; OECD 2019c). The largest type in terms of monetary transaction is Business-to-Business (B2B) E-commerce, where one business focuses on selling to another. Providing online product and service support, communications of company's products (promotion and advertising), e-procurement of products and services and electronic supply chain management are examples of B2B E-commerce (Gregory et al. 2017). The other type of E-commerce widely discussed in the literature is Business-to-Consumer (B2C) E-commerce, whereby businesses attempt to sell to individual customers. The most prominent business model within B2C E-commerce is online retailers such as Amazon and Alibaba. While traditionally B2B transactions dominated the E-commerce landscape, B2C is rapidly increasing (OECD 2019c). Another major type of E-commerce is Consumer-to-Consumer (C2C) E-commerce, which provides a way for consumers to sell to one another using a platform provided by an online market maker or a platform provider such as e-bay, or on-demand service companies such as Airbnb and Uber (Laudon and Traver 2018). Last, there is business-to-government (B2G) E-commerce, whereby governments are engaged in a commercial relationship with businesses.

While B2B, B2C, C2C, and B2G E-commerce constitute the most common types of E-commerce, other ways to participate in E-commerce have recently emerged that are also growing quickly. For example, mobile E-commerce (m-commerce) is a type of E-commerce through which mobile devices, such as smartphones and tablet computers, are used to complete a commercial online transaction (OECD 2019c). Further, social E-commerce, in which E-commerce is enabled by social networks and online social relationships, is another type of E-commerce that has gained popularity in recent years. A well-known example is Facebook, the leading social network (Laudon and Traver 2018).

These different types of E-commerce share common features (using digital technologies and methods specifically designed to receive or place orders to conduct business). Government policies--for example, regulations regarding consumer protection and data protection and privacy--can affect all types of E-commerce. Therefore, in this paper, we consider policies regarding all types of E-commerce.

3 E-commerce Public Policy

Public policies are actions that governments undertake to set goal(s) and utilize means or tools to achieve such goal(s) (Howlett and Cashore 2020). Public policymaking is a dynamic process that is usually the result of a set of interrelated decisions that cumulatively contribute to an outcome (Howlett and Cashore 2014). In an international business context, policy refers to a change governments intentionally make to shape the decision-making and behavior of firms within the international business domain (Clegg 2019; Lundan 2018). Through public policies, governments can decide--within their capacity--whether to act to change or maintain some aspect of the status quo (Birkland 2019; Howlett and Cashore 2014). Governments, for example, can design and implement policies to prioritize the allocation of resources toward the development of a specific sector (Georgallis et al. 2021).

In the context of E-commerce, governments can allocate resources to the development and growth of information and communication technology (ICT) infrastructure and provide access to reliable and affordable ICT services (UNCTAD 2019). This is important as ICT is a key building block of the digital economy, which facilitates and drives E-commerce (OECD/WTO 2017). Through public policy, governments can also design, implement, and communicate up-to-date legal and regulatory frameworks that provide a supportive business environment for E-commerce. Such frameworks may include laws and regulations for electronic documents and e-signature, electronic payments, customer protection measures such as the right of withdrawal (procedures for returning products), and privacy and data protection regulations, including safeguards for the use of personal information (the right to be forgotten) (OECD/WTO 2017). These policies can provide an adequate legal and regulatory framework that mitigates transaction risks and provides transparency within E-commerce (OECD/WTO 2017; OECD...

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