How technological emergence, saturation, and rejuvenation are re-shaping the e-commerce landscape and disrupting consumption? A time series analysis

Hany Fahmy

Applied Economics, 2021, vol. 53, issue 6, 742-759

Abstract: Technological advancements in the ICT sector have enabled the development of online platforms that have drastically transformed the e-commerce landscape. The rise of the sharing economy is a key in point. Academics claim that this change is causing a noticeable shift in consumers’ habits from traditional towards collaborative and sharing activities due to environmental, social, and economic motives. In this article, we test the empirical validity of this hypothesis; namely, we test whether or not the recent change in e-commerce landscape is causing a permanent transition in US consumption over the last two decades by fitting a nonlinear smooth transition regression model to the cycle of US consumption with a constructed exogenous regime-driving variable that captures the various aspects of digital technology. The econometric analysis confirms the existence of a non-permanent regime switch in consumption. In particular, we show that the emergence, saturation, and rejuvenation of digital technology are causing consumption to switch between two stationary regimes. Consumption oscillates smoothly, but frequently, between both regimes in the early period (2000-2006) due to the emergence of new technologies and in the recent period (2017-2019) due to technological rejuvenation. It persists, however, in the mid period (2007-2016) due technological saturation.

Date: 2021
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DOI: 10.1080/00036846.2020.1813249

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