Abstract

Little is known about how e-commerce impacts a firm's performance and hiring decisions. The aim of this study was to empirically assess the impact of e-commerce on employment, labor demand and the skill composition of labor in a developing economy. We used Chile as a case study of a developing economy in Latin America that has seen e-commerce sales increase tenfold in the last decade. Data on e-commerce and employment for around 6,000 firms from the Chilean Ministry of Economy's Longitudinal Survey of Companies (ELE) for 2017 were used. Our identification technique was based on a matching procedure between firms that use e-commerce and those that do not. The fundamental aim was to compare labor demand among similar firms from multiple aspects, with the exception of e-commerce usage. Our results showed that e-commerce has a positive effect not only on total employment but also on hiring in Chilean firms by boosting the demands for both high and medium-skilled labor.