Article | Academy of Management Best Paper Proceedings | 2008

Market Leadership and Strategic Investments in Innovation: The Adoption of E-Business Capabilities

by Kristina Steffenson McElheran

Abstract

This study focuses on whether more-productive firms are more likely to adopt process innovations and why. The empirical context is the adoption of e-business practices among U.S. manufacturing plants in early 2000. Based on detailed data from the U.S. Census of Manufactures, the empirical results indicate that market leadership is, in general, positively correlated with the use of e-business practices. However, there is an important distinction between e-buying and e-selling. In e-buying, the likelihood of adoption is increasing in both relative productivity and in market share. By contrast in e-selling, only market share has a positive (and noisy) relationship with adoption. Plausible explanations for the difference are explored, centering on tradeoffs between stand-alone vs. strategic motivations for adopting as well as important distinctions between the two technologies.

Keywords: Investment; Innovation Strategy; Leadership; Motivation and Incentives; Competitive Advantage; Technology Adoption; Manufacturing Industry; United States;

Citation:

McElheran, Kristina Steffenson. "Market Leadership and Strategic Investments in Innovation: The Adoption of E-Business Capabilities." Academy of Management Best Paper Proceedings (2008): 1–6p, 4 charts. (Finalist for the 2008 Best Paper Award presented by Academy of Management, TIM Division.)