Examining the relationship of country-level digital ad spend and cross-border e-commerce buyers under cultural and political globalization

Abstract

Purpose

Cross-border e-commerce continues to garner much attention within the international marketing literature as the world becomes hyperconnected through digital channels. Although there is an abundance of international marketing research on cross-border e-commerce, there is a lack of information regarding the influences of meta-institutional factors, such as a country’s level of globalization, on the relationship between digital advertising and cross-border e-commerce buyers. The objective of this research is to examine the effects of digital media ad spend at the country level on cross-border e-commerce buyers across countries under differing degrees of formal (i.e. political) and informal (i.e. cultural) institutional globalization.

Design/methodology/approach

This work examines the influence of digital ad spend at the country level and the degree of the country’s formal and informal institutional globalization on the share of cross-border e-commerce buyers. We examine this issue within a 21-country, 8-year, unbalanced panel dataset.

Findings

We find that there is substantive heterogeneity in degrees of formal (i.e. political) and informal (i.e. cultural) institutional globalization and cross-border e-commerce across countries. Digital ad spend at the country level is positively associated with cross-border e-commerce buyers within a country. A country’s level of political globalization enhances, but cultural globalization was found to dampen the positive association. The results indicate that political and cultural globalization of a country both contribute to increased interconnectedness with the global market, yet the nature of the interconnection differs.

Originality/value

The findings are informative to international marketing managers navigating the digital landscape and highlight the importance of institutions in international marketing activities. The study specifically demonstrates the varying effects of the meta-institutional factors of a country’s level of political and cultural globalization on the association between digital ad spend and cross-border e-commerce buyers at the country level, across a wide variety of countries, thus also contributing to the effort to improve generalizations from multi-country comparisons in international marketing research.