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

  • Kristina McElheran
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    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.

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    File Function: First version, 2011
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    Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 11-10.

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    Length: 36 pages
    Date of creation: Apr 2011
    Date of revision:
    Handle: RePEc:cen:wpaper:11-10
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