The Diffusion of E-commerce among SMEs: Theoretical Implications and Empirical Evidence

The Diffusion of E-commerce among SMEs: Theoretical Implications and Empirical Evidence As a specific institution of distributive trades, e-commerce displays similarities with retail stores and mail order companies. As well as providing theoretical support for the assumption that e-commerce is a way to sell certain goods and services at prices potentially lower than those of traditional distributive channels, this paper analyses its inter-firm diffusion among a sample of firms (mostly SMEs) in Italy. The paper has three main purposes. Firstly, it challenges the view of e-commerce as a "technological revolution", by pointing out its nature as a cost-minimizing marketing channel. In particular, it shows how, under certain conditions, e-commerce is a source of transaction cost advantages analogous to those yielded by mail order business. Secondly, the paper identifies from a theoretical viewpoint the circumstances under which e-commerce sales might achieve a significant level of penetration among those SMEs that would otherwise incur high costs in organizing a proprietary distributive channel. Thirdly, it employs a unique data set of Italian manufacturing, service, and hospitality firms (nearly 90% of them with fewer than 100 employees) to estimate a diffusion model based on the logistic curve. According to the estimates, by the fourth quarter of 2003 nearly 50% of the population of firms in the geographical area surveyed will have introduced e-commerce among their marketing channels. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

The Diffusion of E-commerce among SMEs: Theoretical Implications and Empirical Evidence

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2003 by Kluwer Academic Publishers
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1023/A:1025757601345
Publisher site
See Article on Publisher Site

Abstract

As a specific institution of distributive trades, e-commerce displays similarities with retail stores and mail order companies. As well as providing theoretical support for the assumption that e-commerce is a way to sell certain goods and services at prices potentially lower than those of traditional distributive channels, this paper analyses its inter-firm diffusion among a sample of firms (mostly SMEs) in Italy. The paper has three main purposes. Firstly, it challenges the view of e-commerce as a "technological revolution", by pointing out its nature as a cost-minimizing marketing channel. In particular, it shows how, under certain conditions, e-commerce is a source of transaction cost advantages analogous to those yielded by mail order business. Secondly, the paper identifies from a theoretical viewpoint the circumstances under which e-commerce sales might achieve a significant level of penetration among those SMEs that would otherwise incur high costs in organizing a proprietary distributive channel. Thirdly, it employs a unique data set of Italian manufacturing, service, and hospitality firms (nearly 90% of them with fewer than 100 employees) to estimate a diffusion model based on the logistic curve. According to the estimates, by the fourth quarter of 2003 nearly 50% of the population of firms in the geographical area surveyed will have introduced e-commerce among their marketing channels.

Journal

Small Business EconomicsSpringer Journals

Published: Oct 11, 2004

References

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