E-commerce Diffusion in the Nordic Region

University essay from KTH/Industriell ekonomi och organisation (Inst.)

Abstract: This paper studies the relationship between e-commerce diffusion and number of local establishments in the Nordic regions. The analysis is built upon a model which specifies an industry model with consumers search costs buying from heterogenous producers by Goldmanis et al (2010).  E-commerce technology features, such as price comparison websites, have dramatically lowered consumers’ search costs in the online market. Regressions will be tested on the retail sale of three different sectors: food and tobacco, information and communication equipment, and cultural and recreation goods sectors. The results will be compared to the total retail sale sector, and towards the online-only retail sector. Many jobs are on the line if the trend continues to close down local retail stores, and this paper will give an update on where the number of local retail establishments are heading for both policymakers and firm management.

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