How Technological Emergence, Saturation, and Rejuvenation are Re-shaping the E-commerce Landscape and Disrupting Consumption? A Time Series Analysis

Technological advancements in the ICT sector have enabled the development of online platforms that have drastically transformed the e-commerce landscape. The rise of the sharing economy isa key in point. Academics claim that this change is causing a noticeable shift in consumers’ habitsfrom traditional towards collaborative and sharing activities due to environmental, social, and economic motives. In this article, we test the empirical validity of this hypothesis; namely, we testwhether or not the recent change in e-commerce landscape is causing a permanent transition inUS consumption over the last two decades by fitting a nonlinear smooth transition regressionmodel to the cycle of US consumption with a constructed exogenous regime-driving variable thatcaptures the various aspects of digital technology. The econometric analysis confirms the existenceof a non-permanent regime switch in consumption. In particular, we show that the emergence,saturation, and rejuvenation of digital technology are causing consumption to switch between twostationary regimes. Consumption oscillates smoothly, but frequently, between both regimes in theearly period (2000-2006) due to the emergence of new technologies and in the recent period(2017-2019) due to technological rejuvenation. It persists, however, in the mid period (2007-2016)due technological saturation