Globalization and E-Commerce I: Factors Affecting E-Commerce Diffusion in China

China is a large economy with a large absolute gross domestic product (GDP.)However, its huge population brings its GDP and wealth level per capita way below developed countries and in-line with many developing countries. Between 1900 and 2001, China\u27s economy experienced rapid growth (7-8% on average) as did its telecommunications, information technology (IT) and Internet infrastructures (50% - 200% on average). Its large population brings the penetration rates of these infrastructures way below developed countries and a little higher than many developing countries. China\u27s infrastructure is characterized by disparities among geographic areas, demographics, and firm size. Large cities and economically advanced coastal provinces enjoy much better infrastructure and many more Internet users than remote and economically poorer provinces. Large enterprises have bigger IT budgets and better-trained staffs than small- and medium-sized enterprises. A younger population with higher education is more likely to adopt Internet and e-commerce. The infrastructure disparity leads to e-commerce diffusion disparity. Current e-commerce activities are concentrated in large cities, coastal provinces, large enterprises, and among well-educated young people. The legal environment for e-commerce is better in large cities and coastal provinces because they publish local laws regarding e-commerce and IT infrastructure. Barriers to e-commerce diffusion include poor technical infrastructure, lack of security, lack of a system to monitor and guarantee buyer and seller credibility, and an inefficient delivery system. The lack of a credibility monitoring system extends to both vendors and individual consumers. Taxation and privacy, which are vital to e-commerce diffusion in many other countries, do not appear to be serious concerns yet. However, content censorship is among the top concerns. The most significant driving forces are government promotion and private entrepreneurial desire to make profits. Government initiatives include general promotion of the IT industry, an industrial and regulatory policy to foster competition among service providers, encouragement of E-government, and sponsorship of projects to mobilize public awareness, such as the Enterprise Online Project and Home Online Project . The poor infrastructure for e-commerce in China pulled e-commerce back to a base building stage after an initial explosive stage. Significant diffusion can only occur after a solid infrastructure is built up, including the technical and legal infrastructure. Two examples, an E-store for residents in a local living complex and the E-system for college admissions, demonstrate e-commerce models unique in China

The low cost production imperative and foreign direct investment decision by small and medium sized enterprises

Global production shifts in the form of foreign direct investments are reshaping the economic map: one of the outcomes is today’s global production system. The firms in focus are confronted with the effects of the reshaped economic map, especially with the differences in production conditions of nations. The new situation, which has emerged, is summarised by the term ‘low cost production imperative’. Consequently, the purpose of this dissertation is to empirically explore the notion of the ‘low cost production imperative’; and to investigate the implications and consequences of the low cost production imperative for internationalisation decision-making. Scholars of academic studies summarise that fairly little is known about companies’ foreign direct investment decision-making processes and the combination of the determinants with location-specific variables with the strategic motivation of the investing firm. It is assumed even more rarely, that investigations combine the knowledge based on which firms identify important location-specific variables under an enforcing strategic motive and then have to decide a location choice in a low cost operation area. The research is carried out with the eventual aim of generating theory and producing insights into the strategic management practices of the firms in focus and their position in relation to uncertainty, predictability, and preparedness for the outcome of their decision-making related to the phenomenon. The methodological conduct of this inquiry is framed within the qualitative paradigm. The methodological contribution lies in the combination of applied methodologies and modus operandi so that a rich and holistic insight into the phenomenon will be achieved. The research results show a rich variety in outcomes and details from the cases regarding their examination with the determinants important for a successful foreign direct investment. It is evident in all the cases that decision makers behave according to different rules than those assumed much of in the international business literature. Further, the phenomenon is identified as a serious outside force that causes firms to consider a decision to look abroad or more detailed, to look for efficiency in distant regions. This dissertation identifies details of mentioned aspects and calls for applications in future research in international business