Enterprise digital divide: Website e-commerce functionalities among European Union enterprises

Abstract

Background: ICT gained prevalent organizational and structural value in the modern economy. It became a significant backbone for economic growth and social development. E-commerce is one of the industries directly influenced by technological change. However, not all countries have the same opportunities to develop e-commerce growth; there are significant discrepancies in ICT utilization worldwide, known as the digital divide. Objectives: The purpose of this paper is to explore if there is a difference among European countries' e-commerce functionalities using cluster analysis.  Methods/Approach: To accomplish the paper goal, the k-means cluster analysis was conducted on the Eurostat data form 2019. Enterprises from 28 European countries were taken into consideration. Kruskal-Wallis test is used to explore tests whether the differences among clusters regarding the digital development, measured by DESI index are significant. Results:The investigation confirmed that there are significant differences among European countries regarding the development of e-commerce. However, similar level of e-commerce is not fully linearly related to the economic and digital development.  Conclusions: The e-commerce functionalities development across countries are often interrelated with overall economic development, which indicated that the counties which show lower economic growth have also lower e-commerce functionalities. However, this relationship is not linear among European countries, indicating that country-level policies are possible significant factors driving e-commerce development.