E-Commerce and Factors Affecting Its Development: Empirical Evidence from Europe

Vesna Bucevska and Jasmina Bucevska
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Vesna Bucevska: Faculty of Economics, Cyril and Methodius University in Skopje
Jasmina Bucevska: Komercijalna Banka AD Skopje

Ekonomski pregled, 2025, vol. 76, issue 3, 210-224

Abstract: To investigate the factors that drive e-commerce growth in Europe, we performed a panel data analysis utilizing annual data from 32 European nations spanning a 12-year timeframe (2010 to 2021). By applying the advanced econometric technique Fully Modified Ordinary Least Squares (FMOLS) estimation we find that GDP per capita, internet usage for finding information about goods and services, level of education, computer skills, and internet access all positively and significantly affect e-commerce development. Conversely, the use of the internet for engaging with public authorities does not significantly affect e-commerce, while online banking usage shows a significant negative effect. Our study contributes to the existing literature by analyzing a larger and more representative panel over a broader time period, and by investigating some relatively under-explored variables. The findings are crucial for policymakers in developing strategies to boost e-commerce, focusing on economic growth and improving digital infrastructure and broadband internet access.

Keywords: e-commerce; online purchase; panel data analysis; fully modified ordinary least squares method; Europe (search for similar items in EconPapers)
JEL-codes: C01 O52 (search for similar items in EconPapers)
Date: 2025
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