This chapter presents a conceptual model that explains how e-commerce adoption in developing countries is affected by various infrastructure enablers and socio-economic variables. It describes the status of infrastructure enabler variables such as computer and Internet penetration, quality and speed of Internet connectivity, security infrastructure, online payment mechanisms and dispute resolution mechanisms in India and their impact on e-commerce adoption. Furthermore the chapter highlights the relationship between e-commerce adoption and various socio-economic variables such as prices, market reach, disposable income level, and cultural orientation of consumers. The chapter discusses the taxation of e-commerce, taking into account the complexity of the tax structure in India. A couple of mini-cases exemplify the utility of e-commerce in some practical applications. With this review of e-commerce adoption, stakeholders such as the government, the policy makers and industries will be able identify ways to nurture the positive effects and mitigate the negative effects to sustain the growth of e-commerce in many developing countries such as India.
We use large survey data sets of firms provided by the World Bank for China, India, and Brazil-Investment Climate Surveys-to address the important question: what determines the locational choice of firms among cities in these countries. We find that capital cities in all countries are attractive for firms to locate. In India and China, labour-intensive firms tend not to locate in mid-sized or large cities, when compared with smaller ones, perhaps due to higher wage, training and attrition costs. Labour regulations both in India and China deter firms from locating in the larger cities, but not in Brazil. Exporter firms prefer to locate in large cities in these two countries, but not so in the largest cities of Brazil. Finally, while the size of a firm has no impact on its location decision in China, large firms in India prefer to locate in the largest cities, but not in mid-sized cities. Proximity to inputs within the city has a positive impact on firm location. The post-reform firms in China tend to locate in the large cities whereas in the case of India, post-1991 firms refrain from locating in the mid-sized or large cities. These findings have important policy implications for urban governance in these countries, which are summarized in the paper.
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