Management
Science
2006, Vol.52, No.10, pp.1557-1576.
The
Process of Innovation Assimilation by Firms in Different Countries:
A
Technology Diffusion Perspective
Kevin Zhu*,
Ken Kraemer, and Sean Xu
Abstract
This paper studies the assimilation of Internet-based
e-business innovations by firms in an international setting. Drawing upon
theories on the stages and contexts of technology diffusion, we developed an
integrated model to examine the influence of contextual factors on three stages
of e-business assimilation: initiation�adoption�routinization. We
propose that assimilation is a function of technical, organizational and
environmental contexts, which are captured by technology readiness, technology
integration, firm size, global scope, managerial obstacles, competition
intensity, and regulatory environment. A large dataset of 1,857 firms from ten
countries is used to test the conceptual model and hypotheses. To probe deeper
into the influence of the environmental context, we compare two subsamples from
developed and developing countries. Our empirical analyses lead to several key
findings: (1) competition positively
affects initiation and adoption, but negatively impacts routinization,
suggesting that too much competition is not necessarily a good thing for
technology assimilation as it drives firms to chase the latest technologies
without learning how to use existing ones effectively; (2) large firms tend to enjoy resource advantages at the initiation
stage, but have to overcome structural inertia in later stages; (3)
while technology readiness is the
strongest factor in developing countries, technology integration is the strongest facilitator in developed countries,
suggesting that as e-business evolves, the key determinant of its assimilation
shifts from accumulation to integration
of technologies; (4) the negative effect of global scope on routinization is
mitigated by technology integration, suggesting that technological capability
and firm structure interact and jointly affect innovation assimilation; and (5)
economic environments shape innovation assimilation, and regulatory environment
plays a more important role in developing countries than in developed
countries. Together, these findings offer insights into how innovation
assimilation is influenced by contextual factors, and how the effects may vary
across different stages and in different environments.
Keywords
Technology Diffusion, Innovation Assimilation,
E-Business, Competition, Firm Size, Technology Integration, International
Perspective