A Panel Data Model on e-Business Development of Nations

Abstract

e-Business development has become a key factor for the sustainable economic growth and development of any nation in this new era of digital revolution. This is a macro level study based on the hypothesis that the e-business development of a nation can be predicted on the basis of four independent estimators, namely, 1) Country Characteristics; 2) Business Sophistication; 3) Technological Readiness; and 4) e-Government Support. A panel data of five years (2012-2016) relating to 132 world countries were collected and analyzed. The objective of the study is to develop a panel data regression model (fixed effect) which could test the theoretical foundation that e-business development of a nation could be predicted by the above four estimators. Suitable measurement indicators are collected from reliable sources like IBRD, IMF, WEF, UNCTAD, UN e-Government Report and the Transparency International for the measurement of the variables in the study. The overall functional relationship of the model is proved statistically significant on obtaining a significant F-value at <1% level and also with a high R-square value. All the coefficients are positive and significant at 1% level and hence it is proved that country characteristics, business sophistication, technological readiness, and e-government support have strong positive association to the e-business development of a nation. The growth of e-business, of course, leads to a raise in investment in Information Communication Technology (ICT) which turned out to a raise in productivity and economic growth of a nation. In conclusion, e-Business development of a nation shall be explained as ‘the formation of a culture of innovation, sophistication, discipline, adaptation, and transformation of businesses and society at large’.