Do Market Leaders Lead in Business Process Innovation? The Case(s) of E-Business Adoption
AbstractThis paper investigates the relationship between market position and the adoption of IT-enabled process innovations. Prior research has focused overwhelmingly on product innovation and garnered mixed empirical support. I extend the literature into the understudied area of business process innovation, developing a framework for classifying innovations based on the complexity, interdependence, and customer impact of the underlying business process. I test the framework’s predictions in the context of ebuying and e-selling adoption. Leveraging detailed U.S. Census data, I find robust evidence that market leaders were significantly more likely to adopt the incremental innovation of e-buying but commensurately less likely to adopt the more radical practice of e-selling. The findings highlight the strategic significance of adjustment costs and co-invention capabilities in technology adoption, particularly as businesses grow more dependent on new technologies for their operational and competitive performance.
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Bibliographic InfoPaper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 11-10.
Length: 36 pages
Date of creation: Apr 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-23 (All new papers)
- NEP-CSE-2011-04-23 (Economics of Strategic Management)
- NEP-INO-2011-04-23 (Innovation)
- NEP-IPR-2011-04-23 (Intellectual Property Rights)
- NEP-KNM-2011-04-23 (Knowledge Management & Knowledge Economy)
- NEP-TID-2011-04-23 (Technology & Industrial Dynamics)
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