Electronic business adoption by European firms: a cross-country assessment of the facilitators and inhibitors

Abstract

In this study, we developed a conceptual model for studying the adoption of electronic business (e-business or EB) at the firm level, incorporating six adoption facilitators and inhibitors, based on the technology–organization–environment theoretical framework. Survey data from 3100 businesses and 7500 consumers in eight European countries were used to test the proposed adoption model. We conducted confirmatory factor analysis to assess the reliability and validity of constructs. To examine whether adoption patterns differ across different e-business environments, we divided the full sample into high EB-intensity and low EB-intensity countries. After controlling for variations of industry and country effects, the fitted logit models demonstrated four findings: (1) Technology competence, firm scope and size, consumer readiness, and competitive pressure are significant adoption drivers, while lack of trading partner readiness is a significant adoption inhibitor. (2) As EB-intensity increases, two environmental factors – consumer readiness and lack of trading partner readiness – become less important, while competitive pressure remains significant. (3) In high EB-intensity countries, e-business is no longer a phenomenon dominated by large firms; as more and more firms engage in e-business, network effect works to the advantage of small firms. (4) Firms are more cautious in adopting e-business in high EB-intensity countries – it seems to suggest that the more informed firms are less aggressive in adopting e-business, a somehow surprising result. Explanations and implications are offered.

Keywords:

• electronic business
• adoption
• empirical data
• technology competence
• readiness
• firm scope
• europe
• technology–organization–environment framework

Acknowledgements

An earlier version of this paper was presented at the 23rd International Conference on Information Systems (ICIS), where this paper also won the Best Paper Award, Conference Theme. Data were provided by Empirica, GMBH, Bonn, Germany. The research has benefited from the comments of Sanjeev Dewan, Deborah Dunkle, John Mooney, Paul Gray, and session participants at ICIS 2002.