How e-commerce adoption reshapes Scandinavian retail organisations: Employment intensity, enterprise density, and labour productivity

Abstract

This study provides a comparative macro-structural assessment of how e-commerce adoption is reshaping retail organisation in Scandinavia, which is one of the world's most digitally advanced retail regions. While prior research has focused on consumer behaviour, firm-level digital transformation, and omnichannel operations, little is known about how digital adoption aggregates into sector-wide outcomes. Drawing on dynamic capabilities theory and knowledge-based structural change, this paper examines whether increases in the share of retail enterprises selling online are associated with changes in employment intensity, enterprise density, and labour productivity. In addition, the analysis incorporates national urbanisation to explore whether spatial context conditions these structural adjustments. Using harmonised Eurostat data for Denmark, Finland and Sweden (2015–2020), fixed-effects, lagged-dependent-variable and ARDL models were estimated and complemented by robustness checks including variance inflation factors, Granger causality, and residual diagnostics. The results offer novel macro-level evidence that e-commerce functions as a capability-enhancing transformation rather than a disruptive force in advanced retail ecosystems. They show that e-commerce adoption is consistently associated with stable or increasing employment per enterprise and non-declining enterprise density, which informs that digitalisation complements rather than displaces workforce and store networks. Urbanisation exerts meaningful but heterogeneous influences on these structural relationships, highlighting the spatial embeddedness of digital retail transformation. Labour productivity effects are gradual and model dependent. Short run associations are weak, but dynamic specifications show positive lagged effects, which explains that efficiency gains materialise only after organisational adjustment.

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