DIGITAL MONSTERS: An empirical analysis of the effect of increasing e-commerce on firms and markets in Sweden

Abstract: The aim of this thesis is to develop an understanding of how Swedish retailers selling goods on the consumer market and the competition among them have been affected by the growth of e-commerce between the years 2007-2015. Firm specific data from 133 firms have been used together with market specific data estimated from 6850 firms to analyse why some firms do better than others, and which decisions related to e-commerce that have been favourable during the observable period of time. The performance of firms is measured with the development of their market shares between 2007-2015. The study introduces a new variable to measure when firms started using e-commerce, based on when they first mentioned e-commerce in their annual report. The results imply that early entrants in e-commerce have had an advantage, that large incumbent firms do not have any additional advantages and that old firms are stuck in a path dependence and do not use internet retailing to the same extent as younger firms.