Information Systems Research

Vol. 16, No. 1, March 2005, p.61-84



Post-Adoption Variations in Usage and Value of E-Business by Organizations:

Cross-Country Evidence from the Retail Industry


Kevin Zhu*  and  Ken Kraemer




Grounded in the innovation diffusion literature and the resource-based theory, this paper develops an integrative research model for assessing the diffusion and consequence of e-business at the firm level. Unlike the typical focus on adoption as found in the literature, we focus on post-adoption stages, i.e., actual usage and value creation. The model thus moves beyond dichotomous ��adoption vs. non-adoption�� and accounts for the ��missing link�� �C actual usage �C as a critical stage of value creation. The model links technological, organizational, and environmental (TOE) factors to e-business use and value, based on which a series of hypotheses are developed. The theoretical model is tested by using structural equation modeling on a dataset of 624 firms across ten countries in the retail industry. To probe deeper into whether e-business use and value are influenced by economic environments, two subsamples from developed and developing countries are compared. The study finds that technology competence, firm size, financial commitment, competitive pressure, and regulatory support are important antecedents of e-business use. In addition, the study finds that, while both front-end and backend capabilities contribute to e-business value, backend integration has a much stronger impact. While front-end functionalities are becoming commodities, e-businesses are more differentiated by backend integration. This is consistent with the resource-based theory because backend integration possesses the value-creating characteristics of resources (e.g., firm specific, difficult to imitate), which are strengthened by the Internet-enabled connectivity. Our study also adds an international dimension to the innovation diffusion literature, showing that careful attention must be paid to the economic and regulatory factors that may affect technology diffusion across different countries.


Key words:

Technology diffusion, innovation, e-business, IT investment, usage, value, backend integration, firm performance, resource-based view, international perspective

* Contacting author.