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Grounding on new institutional economic theory, this paper studies the impact and effect of institutional environment on Business-to-Business (B2B) e-commerce adoption in the Greater China region and USA. In a two-phase study, we find that 1) industrial pressure is always the most powerful external facilitator for B2B e-commerce adoption; 2) at the beginning stage of e-commerce, supportive government policy was a prime force to encourage private sector to adopt e-commerce; and 3) as e-commerce becomes more prevalent and routine in business, e-commerce adoption is more business-driven and governmental policy loses its influence. The study is one of the first cross-country studies on the institutional environment and fills the knowledge gap of understanding the external environment of e-commerce.