Effect of Country Distance on E-commerce Export: Focusing on the Moderating Effect of Entrepreneurship

Purpose – This study examines the role of e-commerce resulting from technological innovation as a new approach toward internationalization. We study the relationship between e-commerce export and country distance, measured in CAGE distance, which has hindered traditional internationali zation. As a control variable, entrepreneurship was introduced to check the moderating effect on the relationship between country distance and e-commerce export. Design/methodology – Based on empirical analysis, e-commerce exports from the Republic of Korea to 96 countries were used as dependent variables. First, hierarchical regression analysis was conducted to test the hypothesis about each country's distance, measured by CAGE distance, and each dimension of CAGE, on e-commerce exports. Next, the hypothesis was tested through the interaction term to examine the moderating effect of entrepreneurship. Findings – The analysis showed that the hypothesis, which postulated e-commerce exports as affected negatively by the country's distance, was supported but not that all CAGE dimensions affected it. Specifically, geographical distance and economic distance have negative effects, but cultural distance and administrative distance did not affect e-commerce exports. Thus, in contrast to the expectation that distance restrictions in e-commerce would not exist, this study confirmed that distance still matters to internationalization and that entrepreneurship can mitigate the adverse effects. Originality/value – Through these results, when export firms try to enter new markets and start internationalization through e-commerce, the entrepreneurship of the importing country should be considered.