Do Market Leaders Lead in Business Process Innovation? The Case(s) of E-Business Adoption

Kristina McElheran

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: This paper investigates the relationship between market position and the adoption of IT-enabled process innovations. Prior research has focused overwhelmingly on product innovation and garnered mixed empirical support. I extend the literature into the understudied area of business process innovation, developing a framework for classifying innovations based on the complexity, interdependence, and customer impact of the underlying business process. I test the framework’s predictions in the context of ebuying and e-selling adoption. Leveraging detailed U.S. Census data, I find robust evidence that market leaders were significantly more likely to adopt the incremental innovation of e-buying but commensurately less likely to adopt the more radical practice of e-selling. The findings highlight the strategic significance of adjustment costs and co-invention capabilities in technology adoption, particularly as businesses grow more dependent on new technologies for their operational and competitive performance.

Pages: 36 pages
Date: 2011-04
New Economics Papers: this item is included in nep-cse, nep-ino, nep-ipr, nep-pr~, nep-knm and nep-tid
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https://www2.census.gov/ces/wp/2011/CES-WP-11-10.pdf First version, 2011 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:11-10

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