Determinants of E-Commerce Turnover in Europe: Consumer Protection Matters

Abstract

During the last decade the digital economy has expanded at a faster rate than traditional sectors. There is a strong consensus that e-commerce has a positive impact on labour productivity, GDP growth and consumer purchasing power. However, factors determining successful adoption of online commerce remain insufficiently studied. The consequences are clearly visible in the European Union whose countries failed to achieve the targets of the Digital Agenda 2015, with insufficient cross-border trade and inadequate participation of small to medium-sized enterprises (SMEs) in the digital market. The aim of this paper is to fill the research gap with an EU28 panel study describing the impact of policy factors on online sales from 2010 to 2015. The authors have found that internet network coverage and adequate protection of consumer rights are significant and equally important factors influencing online turnover. This implies the need to harmonise national policies between EU laggard countries and digital market leaders. Furthermore, our research rejects the hypothesis that geographical and demographic factors could create a permanent negative bias on online sales volume. The study also provides evidence that the impact of structural macroeconomic variables (i.e. country income measured by GDP per capita, education, and ICT skills) on final e-commerce turnover is limited. Finally, the authors have established that the national policies of Ireland and the Czech Republic are more effective than those of other EU countries, which is most likely due to increased support of SME engagement in online activities.