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Do Market Leaders Lead in Business Process Innovation? The Case(s) of E-Business Adoption

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  • Kristina McElheran

Abstract

This 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.

Suggested Citation

  • Kristina McElheran, 2011. "Do Market Leaders Lead in Business Process Innovation? The Case(s) of E-Business Adoption," Working Papers 11-10, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:11-10
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    File URL: https://www2.census.gov/ces/wp/2011/CES-WP-11-10.pdf
    File Function: First version, 2011
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    Cited by:

    1. Prasanna Tambe & Lorin M. Hitt, 2014. "Job Hopping, Information Technology Spillovers, and Productivity Growth," Management Science, INFORMS, vol. 60(2), pages 338-355, February.

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