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Technologies 14/03/2024 How does the level of education affect the development of e-commerce?
How does the level of education affect the development of e-commerce?

Tashkent, Uzbekistan (UzDaily.com) -- Experts from the Institute of Macroeconomic and Regional Research (IMRI) studied the impact of education level on the development of e-commerce in countries around the world.

Based on the results of the study, the following results were obtained:

1. Education is a significant factor in the development of e-commerce in countries around the world. An increase in the share of university students by 1 percentage point (pp) contributes to an increase in the e-commerce development index by an average of 0.06 units.

2. The effect of education is especially reflected in the group of countries with lower middle income levels (2500 0.24 units.

3. Along with the education factor, the development of e-commerce is influenced by the share of women in society, the real income of the population and the share of Internet users (infrastructure).

Literature review

Education is one of the key factors in the development of e-commerce in Türkiye (Ş_Ünver, 2021), in European countries (SC Ho, 2007), in developing countries (JE Lawrence, 2010). Thus, it was found that as the level of education of people increased, their propensity for online shopping increased in Turkish households (Ş Ünver, 2021). According to J. E. Lawrence, (2010), most people in developing countries have limited access to information on the Internet because online information requires a certain degree of education and skill.

Education gives people the tools to effectively use e-commerce platforms, analyze consumer behavior, and implement successful online business strategies (A Liban et al., 2023). Without a strong educational foundation, companies will struggle to adapt to the ever-changing e-commerce market and, as a result, miss out on valuable opportunities for growth and innovation.

In addition, education fosters a culture of innovation and entrepreneurship, which is very important for the development of e-commerce. By providing people with the knowledge and skills to create and manage online businesses, education empowers entrepreneurs to take risks, experiment with new ideas, and develop innovative solutions to meet the needs of the digital market (A Khattak, 2023).

Methodology

To analyze the impact of education on the development of e-commerce, econometric models were built based on cross-country panel data

United Nations Conference on Trade and Development (UNCTAD) and the World Bank for 152 countries from 2016 to 2020.

The UNCTAD B2C e-commerce index was used as a dependent variable reflecting the level of e-commerce development.

Since the development of e-commerce in theoretical studies is based on the standard of living of the population and indicators of ICT infrastructure, the following factors were used as explanatory variables:

1. Proportion of university students;

2. Real income of the population (in constant 2015 prices);

3. Number of subscribers with Internet access (number of users), per 100 people.

For econometric analysis of panel data, a comparison of models with fixed and random effects was used. According to the results of the Hausman test (Prob> chi2 = 0.00), the model with fixed effects is preferable.

However, the model contains heteroskedasticity (Modified Wald test Prob>chi2 =0.00) and autocorrelation (Wooldridge test for autocorrelation in panel data Prob > F = 0.00), therefore, the estimates of the model with fixed effects are not reliable. To take into account the above factors, a GLS regression model with AR(1) perturbations was used.

Results

As part of the analysis of the general group of countries, it was revealed that the increase in the share of university students by 1 p.p. contributes to the development of e-commerce by an average of 0.06 units. Increase in the share of women by 1 percentage point. develops e-commerce by 0.79 units, an increase in income by 1% - by 0.1 units, an increase in the share of Internet users by 1 percentage point. – by 0.25 units.

Uzbekistan is included in the group of countries with lower middle income; therefore this group of countries was isolated from the general sample. It was revealed that for this group the effect of education is almost 4 times higher and amounts to 0.24. The share of women in society and income also had a significant impact, but the number of Internet users turned out to be insignificant.

This may be due to the fact that in this group of countries, road infrastructure (especially rural) does not allow full use of e-commerce opportunities, since the delivery of goods is an obstacle. This hypothesis is the subject for further analysis of rural regions in this group of countries at the micro level.

Conclusions

1. Education is a significant factor in the development of e-commerce, especially in the group of countries with lower middle incomes

2. Along with education, income, the share of women in society and access to the Internet have a positive impact

3. In the group of countries with lower middle incomes, the Internet does not have a significant impact, which signals that the potential of the Internet has not been sufficiently realized and requires further study of the situation.
 
Anton Kostyuchenko,
IMRI project manager
Odiljon Nazarov,
leading researcher at IMRI

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