Uncertainty avoidance and its effect on diffusion of electronic commerce - a crosscountry study

Abstract

The diffusion of e-commerce has seen a significant surge in recent years. Economic, political, and technological factors are considered as the main determinants of technology diffusion. However, these findings appear inconclusive as diffusion rates of e-commerce diverge considerably across countries, even with similar economic and political situations. There is evidence that socio-cultural factors can be relevant in explaining cross-country discrepancies in technology diffusion; nevertheless, its effect on internet retailing has rarely been explored. Furthermore, the highest barrier to the success of e-commerce is the perceived risks in that mode of retailing. This makes us wonder whether the risk perception across countries can help explain disparities in e-commerce growth rates across nations. This study focuses on uncertainty avoidance, a measure of the extent that people in a given culture feel threatened by the unknown to explain cross-country e-commerce diffusion. This study further explores the role of technology infrastructure in e-commerce diffusion, intending to explain the moderating effect of technology infrastructure on the relationship between uncertainty avoidance and e-commerce diffusion. The results reveal that uncertainty avoidance has a significant negative impact on the diffusion of internet retailing. However, with a reliable technological infrastructure, this negative effect is weakened.