Who purchases cross-border? Individual and country level determinants of the decision to purchase cross-border in the Eu
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Who purchases cross‑border? Individual and country level determinants of the decision to purchase cross‑border in the European Single Market Leo Sleuwaegen1 · Peter M. Smith1 Accepted: 1 September 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract E-commerce possesses considerable potential for developing the internationalisation and integration of consumer markets by bringing sellers and consumers from different countries directly into contact with each other without the requirement for intermediaries. However, cross-border online purchases remain low compared to domestic online purchases. Large differences between individual countries are also observed in the percentage of consumers who purchase cross-border. While previous studies of e-commerce have concentrated on the decision to buy on-line, this study concentrates on the decision to purchase cross-border compared to purchasing on-line only domestically. To this end, a statistical qualitative response model is developed and tested against a large data set of consumers living in the thirty countries belonging to the European Economic Area. The results demonstrate the importance of country level determinants in addition to the personal characteristics of the consumer in terms of their age, gender, profession, educational background, location and trust in non-domestic suppliers in the decision to purchase cross-border. Among the country level determinants, domestic market size, economic development and ethnic fractionalization of the country are all shown to play an important role. The results have important practical implications for e-commerce sellers as well as public authorities. The country-specific socio-economic determinants can help to better assess the potential market for cross-border selling and guide public policies aimed at stimulating cross-border selling as a means to integrate consumer markets in the European Economic Area. Keywords International trade · Services · E-commerce · Consumer theory · Internal market
* Peter M. Smith [email protected] 1
MSI, KU Leuven, Naamse straat 69, 3000 Leuven, Belgium
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L. Sleuwaegen, P. M. Smith
1 Introduction Purchasing over the internet allows consumers to deal directly with sellers irrespective of where they are based [61]. This greatly facilitates the internationalisation of consumer markets. It also facilitates the observation of cross-border purchasing compared to purchasing from domestic sellers—a characteristic that is exploited in this paper. In spite of the ease of purchasing cross-border within the Single European Market, there are still many consumers who refrain from making online crossborder purchases. According to the 2016 Eurobarometer survey on consumers’ attitudes towards cross-border trade and consumer protection, the average proportion of consumers who shop online in the EU-28 is now 76.0% [34]. However, only 18.9% purchase cross-border from EU-based sellers and 8.4% cross-border from sellers located outside the EU. The ab
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