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Paper Information

Journal:   PEYKE NOOR JOURNAL   WINTER 2005 , Volume 2 , Number 4 (ECONOMICS); Page(s) 74 To 90.


Author(s):  GOODARZI D.A.*

There are several controversies over the interactional effects of e-commerce on economic growth. During recent years, economists’ point of views in this respect have got closer to each other, and most of them maintain a positive relation between e-commerce adoption and economic growth.
In the article, after presenting an introduction, the theoretical and empirical literature is being considered with an emphasis on new studies. Then, some initial hypotheses relating to the adoption of e-commerce by developing countries will be considered. Finally, the model will specified. The main objective of the model is fitting relationship between e-commerce and economic growth. The specification includes three stages:
First stage analyzes correlation between key variables. The relationship between “the number of internet hosts per 10000 inhabitants” and “gross domestic fixed capital formation” (as an index for physical capital), “gross enrolment ratios (tertiary) (as an index of human capital), and “the number of telephone lines per 1000 inhabitants” (as an index for e-commerce infrastructures).
In the second stage, the main objective is designing a composite measure of investment for the full data set of 208 countries during 1999-2001, by using principal component analysis. The method let us delete high correlation variables with “the number of internet hosts per 1000 inhabitants”, so, a 207
´207matrix is formed and the composite measure is made.
In the third stage, the growth model is fitted by estimating the relationship between GDP and the number of internet hosts, and then the composite measure of investment (CMI) in the form of an econometric model (Panel Data) is estimated.
The results show a positive effect of e-commerce on economic growth, and emphasize on the different effects of e-commerce on growth in developed and developing countries. Finally, concluding the comments will be presented.

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