The Problem of Infrastructure on E-Commerce, Small and Medium Enterprises in Nigeria

Abstract

This study focuses on the problem of infrastructure as it affects electronic commerce, small and medium enterprises in Nigeria from the period 1990-2014. With a dichotomous dependent variable, the use of probit model estimated with maximum likelihood method was deployed. Nine regressors (financial cost, business size, infrastructure, government support, managerial support, security concern, I.T capability, market readiness and employment generation) model, their marginal effects and first difference effects were derived. The study reveals that ecommerce is impactful on SME performance in Nigeria and very capable in attracting investments into the ICT sector of the Nigerian economy. The study suggests that small and medium scale enterprises need to own, maintain and publish products and services on the internet through creation of domain websites to access global markets and maximize the benefits of ecommerce. In addition, the need for government to create enabling laws for handling online commercial disputes and enhance infrastructure necessary for SMEs to leverage ecommerce benefits through steady power supply and transportation systems amongst others were suggested.

Keywords: Infrastructure, E-commerce, Small & Medium Enterprises, Probit Model