Motivated by a rising popularity and economic as well as political importance of the E-commerce sector, this research investigates how the high-speed broadband internet coverage and the usage intensity of people influence the share of web buyers in a country. This question is examined by studying a comprehensive panel data set covering the EU-28 member states in the period from 2003 until 2018.
Findings suggest that a more widespread availability of fixed broadband internet exerts a significant positive influence on the amount of online shoppers, while mobile broad-band connectivity is found to be adversely related. Furthermore, the results claim that the more frequent internet users, the higher the national percentage of internet purchasers. These outcomes are of relevance to all stakeholders with interest to push the devel-opment of the European E-commerce sector further.
Bill Gates has once predicted that the internet is becoming the town square for the global village of tomorrow. Being a vision at that time, current developments show that this statement addresses no longer only the future - it has never before described the present so suitably. Within the last years, the internet has evolved to be a central information hub for individuals and is nowadays tightly embedded into our everyday life.
Information on nearly everything can be gathered from the web, a big part of social life takes place in the virtual sphere and the internet has entered the professional space a long time ago - the progressing digitalization moves a steadily increasing share of activities online. Since access to high-speed internet is vastly increasing, people get accustomed to an ubiquitous connectivity.
One application of the internet that steadily gained popularity for many years now re-lates to an initial purpose of the "town square", which used to be the location of a market. Facilitated by the broad deployment of network technologies and their rapid devel-opment, companies increasingly offer their products via online channels. Consumers value the convenient shopping experience accessible around the clock and benefit from a greater variety of merchandise as well as often lower prices. Firms profit by cost savings, an augmented customer base and new sales options in return.
Table of Contents
1 Introduction
2 Related literature
2.1 Literature on psychological determinants and socio-demographics influencing the online purchasing behavior
2.2 Literature on the impacts of broadband on various economic outcomes
3 Framework development
4 Data
4.1 Sample construction
4.2 Introducing the variables
4.2.1 The dependent variable
4.2.2 Explanatory variables
5 Econometric model
6 Estimation results
6.1 Main estimation results
6.2 Results of subgroups of individuals
6.3 Robustness checks and limitations
7 Discussion
8 Conclusion
Research Objective & Core Topics
This thesis examines the determinants of e-commerce adoption in the European Union, specifically investigating how high-speed broadband infrastructure and internet usage intensity influence the national share of online shoppers.
- Impact of fixed high-speed broadband (NGA) on online purchasing behavior.
- Analysis of mobile broadband (LTE) connectivity effects on e-commerce adoption.
- The influence of internet usage intensity and digital literacy on consumer behavior.
- Role of national economic indicators (average income) as control variables.
- Comparative analysis of demographic subgroups (age, gender, education, residence density).
Excerpt from the Book
LTE coverage (LTEcov)
The Long Term Evolution protocol refers to advanced fourth generation (4G) mobile broadband and also comprises an indicator that is defined as households covered.
The values for the EU member states are portrayed in Figure 6. The deviation between the coverage rates used to be rather large, ranging from 12% to close to 100% in 2013. Nevertheless, 4G mobile broadband availability has been expanded drastically over the past years. Already in 2017, the divergence had massively declined, extending now only from 88% to 100%, therewith increasingly reaching a comparable level in all EU-28 countries. This rapidly diminishing discrepancy is an auspicious antecedent for the integration of LTE coverage in the research model.
Contrasting again the standard technology with the advanced next generation connection, the same phenomenon as pertaining to the fixed broadband connections is identifiable. Though unlike the NGA coverage, LTE has reached almost exhaustive coverage considering the European average, passing even the third generation technology.
Summary of Chapters
1 Introduction: Discusses the growing significance of the internet and e-commerce, establishing the motivation for researching determinants of online shopping behavior in the EU.
2 Related literature: Reviews existing research on socio-demographic influences on online buying and summarizes the economic impacts of broadband connectivity as classified by prior scholars.
3 Framework development: Outlines the conceptual model and justifies the selection of high-speed broadband and internet usage as the primary explanatory factors for e-commerce adoption.
4 Data: Describes the source of the dataset (European Commission Digital Scoreboard), the sample construction process covering EU-28 member states, and the specific variables used in the econometric model.
5 Econometric model: Explains the use of panel ordinary least squares (OLS) regression with country and time fixed effects to isolate causal influences while controlling for external factors.
6 Estimation results: Presents the findings regarding the impact of NGA and LTE broadband, identifies the role of frequent internet users, and evaluates results across various population subgroups.
7 Discussion: Interprets the statistical findings in the context of European policy, specifically regarding the Digital Single Market strategy and future research needs.
8 Conclusion: Synthesizes the main findings, highlighting that fixed broadband and user intensity are positive drivers, and provides a final outlook on the active path for European digital development.
Keywords
E-commerce, online purchasing behavior, European Union, broadband infrastructure, NGA coverage, LTE coverage, digital literacy, internet usage intensity, panel data analysis, digital agenda, fixed broadband, socio-demographics, econometric model, digital single market, consumer behavior.
Frequently Asked Questions
What is the primary focus of this research?
The study investigates the determinants of e-commerce adoption across the European Union, focusing specifically on whether high-speed broadband availability and internet usage intensity increase the percentage of online shoppers in a country.
What are the central thematic areas covered in the thesis?
The core themes include the impact of network technology infrastructure (fixed vs. mobile broadband) on digital market participation, the role of internet usage intensity as a driver for digital literacy, and the impact of socio-economic factors on online retail.
What is the primary research goal or main research question?
The main objective is to provide empirical evidence on whether the deployment of next-generation broadband access exerts a significant, positive causal impact on national e-commerce adoption rates.
What scientific methodology does the author apply?
The author uses a panel data analysis approach, specifically employing panel ordinary least squares (OLS) regressions. The model includes country fixed effects and categorical time fixed effects to ensure the robustness of the causal estimates.
What topics are discussed in the main body of the work?
The main body moves from theoretical literature reviews and framework development to data collection from the European Commission’s scoreboard, econometric modeling, and the presentation of results covering both the total population and specific demographic subgroups.
Which keywords best characterize this work?
Key terms include E-commerce, broadband infrastructure, digital literacy, NGA coverage, LTE, internet usage intensity, EU digital scoreboard, and panel data analysis.
Why is the negative coefficient for LTE coverage considered surprising?
The author notes that while fixed broadband shows a positive impact, the mobile (LTE) coverage coefficient is unexpectedly negative in the main model. This is described as counterintuitive, as there is no theoretical reason why better mobile connectivity should decrease online shopping.
How does education influence the research findings?
The subgroup analysis reveals that the impact of high usage intensity on online shopping is significantly stronger among highly educated individuals (coefficient of 1.19) compared to less-educated groups (0.53), suggesting that education and digital experience are critical mediators.
What is the importance of the "frequent internet user" variable?
This variable serves as a proxy for digital literacy and experience. The study finds it to be the most significant driver of e-commerce adoption, with a 1% increase in frequent users leading to a 1.3% rise in the share of online buyers.
- Quote paper
- Luisa Zabel (Author), 2019, Empirical Analysis of the Determinants of E-commerce Adoption. Evidence from the European Union, Munich, GRIN Verlag, https://www.grin.com/document/914320
