E-commerce Development in Europe: A Panel Data Analysis 2003–2017

Abstract

The Internet is a networking infrastructure that allows people’s communication throughout the world, transcending time and space limits. Nowadays, the Internet has changed the way of doing business, leading to a digital economy. Indeed, e-commerce has emerged as commercial transactions conducted over the Internet, which has become a source of economic growth for countries. In this sense, the research question conducting this research is as follows: what are the main variables that have affected the development of e-commerce in European countries from 2003 to 2017? In so doing, panel data econometric methods are used in this research. The tests of cross-section dependence (Pesaran test), unit root (Cross-sectional Im, Pesaran and Shin tests), cointegration (Kao and Fisher-Johansen tests), and heterogeneous causality (Hurlin and Dumitrescu test) are applied. In this regard, the results show that the variables in this research are characterized by a transversal dependence, and that they are integrated of order one. Furthermore, there is evidence that the variables are cointegrated, suggesting that there is a long-term relationship equilibrium between these variables. In addition, there is a bidirectional causality relationship between R&D spending (RD) and mobile phone penetration (MPP). Also, there is a unidirectional relationship from the development of e-commerce (EC) to RD and from per capita disposable income (PI) to RD. Besides, results suggest a positive and significant effect of MPP, RD, and PI on the EC in European developed countries. Therefore, these results show that the CE of the developed countries of Europe could be promoted through the improvement of the MPP, DR and IP.