Special Section: Globalization and Electronic Commerce

Brazil presents an interesting case study of local factors influencing the adoption and impacts of e-commerce. It is a large developing country in which some segments of the economy are technologically sophisticated while others are quite backward. Based on existing knowledge of Brazil’s economic and policy environment and its experience with other information technologies, we develop three themes that encompass a priori expectations about the diffusion and impacts of e-commerce. First is the expected leadership of the financial sector, driven by strong IT capabilities and a historical orientation toward automation. Next is the leadership of large firms in adopting e-commerce, driven by economies of scale and scope that enhance the perceived benefits of adoption. Third is the relative importance of local versus global forces in driving e-commerce diffusion. Unlike other countries in which globalization is a driver of e-commerce diffusion, Brazil’s relatively low international integration of the manufacturing industry, its large size, and its historical inward orientation are expected to reduce the role of global factors as e-business drivers. We analyse results from a ten-country survey of 2,100 firms, including 200 in Brazil, to examine these propositions in the light of empirical evidence. We find support for each of the themes. In addition we find that the lack of an adequate legal and regulatory environment to support e-commerce has been an important barrier to adoption.