The Diffusion of E-Commerce Among SMEs: Theoretical Implications and Empirical Evidence

Enrico Santarelli and Samuele D'Altri

Small Business Economics, 2003, vol. 21, issue 3, 273-83

Abstract: As a specific institution of distributive trades, e-commerce displays similarities with retail stores and mail order companies. As well as providing theoretical support for the assumption that e-commerce is a way to sell certain goods and services at prices potentially lower than those of traditional distributive channels, this paper analyses its inter-firm diffusion among a sample of firms (mostly SMEs) in Italy. The paper has three main purposes. Firstly, it challenges the view of e-commerce as a "technological revolution", by pointing out its nature as a cost-minimizing marketing channel. In particular, it shows how, under certain conditions, e-commerce is a source of transaction cost advantages analogous to those yielded by mail order business. Secondly, the paper identifies from a theoretical viewpoint the circumstances under which e-commerce sales might achieve a significant level of penetration among those SMEs that would otherwise incur high costs in organizing a proprietary distributive channel. Thirdly, it employs a unique data set of Italian manufacturing, service, and hospitality firms (nearly 90 percent of them with fewer than 100 employees) to estimate a diffusion model based on the logistic curve. According to the estimates, by the fourth quarter of 2003 nearly 50 percent of the population of firms in the geographical area surveyed will have introduced e-commerce among their marketing channels. Copyright 2003 by Kluwer Academic Publishers

Date: 2003
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