Understanding the determinant factors of Internet business solutions adoption: the case of Portuguese firms

Abstract

The purpose of our article is to identify the determinants of Internet Business Solutions (IBS), using a representative sample of Portuguese business sector in 2006. This article is based on a theoretical framework in which the adoption of IBS is done in two stages. At the first stage, the firm decides to adopt or not a website; at the second stage, those who adopted a website decide on the level of IBS adoption. We considered that the determinants of the adoption decisions can be internal or external and that their effect may be different at the two adoption stages. Based on these assumptions, we develop and test an integrated model of IBS adoption allowing for sample selection. Our results show that the two adoption decisions are taken sequentially and that selectivity bias is not present in our sample. Our findings also suggest that the relevant drivers of website and the level of IBS adoption are not necessarily the same.

Keywords:

• Internet business solutions (IBS)
• website adoption
• level of IBS
• sample selection
• ordered probit with selectivity
• probit
• ordered probit

JEL Classification:

• C13
• C35
• O33
• O32

Acknowledgement

We acknowledge the Portuguese Institute of Statistics (INE) for providing us with the data.

Notes

¹ The summary statistics are available from the corresponding author.