Internet and e-commerce, despite their English speaking and western focused nature (Hedley 1999), are diffusing more rapidly in Hong Kong and Chinese Taipei than in many Western and English speaking countries. A recent e-readiness ranking of the 60 main economies of the world by the Economist Intelligence Unit (EIU) puts Hong Kong and Chinese Taipei in the groups of "e-commerce leaders" (rank 13) and "e-commerce contenders" (rank 16) respectively. In terms of e-readiness, Hong Kong and Chinese Taipei are ahead of European countries such as Belgium, Italy, Spain and Portugal; English speaking countries such as New Zealand; and Asian "capitalist-roaders" (Viksnins 2000) such as Korea and Japan. Asia's share in worldwide e-commerce is estimated to rise from 5% in 2000 to 10% in 2004, and Hong Kong and Chinese Taipei are expected to account for a significant proportion of this growth (Lee et al 2001). Cognizant of such growth potential, many multinationals involved in e-business as well as venture capitalists are showing an increasing level of interest in these economies (Chan 2001). A deeper and clearer understanding of the factors influencing the rapid growth of the Internet and e-commerce would help design appropriate e-commerce models to target consumers in these economies and also to formulate appropriate policies to accelerate Internet diffusion in other countries. While some studies have compared Internet diffusion in Hong Kong and Chinese Taipei (e.g., Foster et al 2000), to our knowledge, no published study has made attempt to make a comparative analysis of Internet and e-commerce diffusion loci of these dynamic Asian economies. This paper attempts to fill this research gap by making a comparative analysis of the determinants of Internet and e-commerce diffusion loci in Chinese Taipei and Hong Kong. We use historical methods to identify and analyze the causes of rapid Internet and e-commerce diffusion in Chinese Taipei and Hong Kong. Our approach is guided by the following two research questions: a) What factors led to Hong Kong and Chinese Taipei's rapid Internet and e-commerce development? and b) What factors are responsible for the difference in the Internet development loci of the two economies? The remainder of the paper is organized as follows. In the following section, we provide a brief survey of the current stages of Internet and e-commerce development in Hong Kong and Chinese Taipei. This is followed by a brief discussion of the methodology used. Then, we attempt to identify and analyze various factors influencing Internet and e-commerce diffusion in the two economies. Next, we revisit the Internet development situation in Hong Kong and Chinese Taipei and provide some conclusions.
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