E-commerce, productivity, and fluctuation

Mei Wen*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

13 Citations (Scopus)

Abstract

This paper studies simultaneous adoption of e-commerce and its impact on productivity and economic structure in a general equilibrium model. It is found that the lower the fixed cost for establishing and maintaining e-commerce and/or the higher the degree of improvement in unit transaction efficiency through e-commerce, the more likely it is that producers will adopt e-commerce. In addition, the adoption of e-commerce can increase productivity and trade dependency, due to the benefits of fixed-cost sharing over a higher trade level and economies of specialization in production. Reduction in unit transaction cost through e-commerce can also increase the level of division of labor and promote structural changes in the economy. However, as the development of the IT sector may reduce fixed cost for e-commerce while improving unit transaction efficiency, further developments of the IT sector can generate fluctuations in economic structure and productivity through e-commerce.

Original languageEnglish
Pages (from-to)187-206
Number of pages20
JournalJournal of Economic Behavior and Organization
Volume55
Issue number2
DOIs
Publication statusPublished - Oct 2004

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