National Institutions, Entrepreneurship and Global Ict Adoption: a Cross-country Test of Competing Theories

To better understand the development of e-commerce across countries we utilize competing theories to examine information and communication technology (ICT) adoption, a critical foundation of global e-commerce. On the one hand, economic institutional theory predicts that strong national institutions will engender trust and thus foster arms length business transactions in a society, such as those conducted using ICT. On the other hand, entrepreneurship theory suggests that new business creation is a main driver of ICT adoption. Drawing on a sample of 80 countries, we find strong support for the institutional argument and weak support for the entrepreneurship view. Our findings further indicate that institutional quality is especially critical in developing countries where it is an important driver for both the basic and more advanced technologies that underpin e-commerce. Implications for theory and public policy are discussed.