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Grounding on institutional theory and e-commerce adoption literature, this study conducts a cross-country analysis, assessing the impact and effect of legal and government environments on global e-commerce adoption in 2003 and 2007, respectively. The study utilizes a set of secondary data from the Economist Intelligence Unit's global e-readiness rankings. The results indicate that at the starting stage of e-commerce, the legal and policy environment was a powerful facilitator for e-commerce adoption. As e-commerce becomes more prevalent recently, the supportive government policy can still foster e-commerce adoption, but the effect of legal environment turns to negligible. The study discusses extensively the e-commerce policy and its impact on e-commerce adoption. It is one of the first cross-country studies on the institutional environment for e-commerce and the research findings have policy implications for global e-commerce development.