E-commerce and Export Performance By Munib Karavdic

The IO approach draws attention to three ways e-commerce disrupts markets (Evans and Wurster 1999; Sahlman 1999). First, it modifies the relative power of buyers and suppliers, as well as intermediaries, by lowering the cost of researching and distributing market information (Mahadevan 2000). Second, the dissemination of information through e-commerce enables more firms to offer substitute products. Finally, the pressure to be involved in business utilising e-commerce creates strong rivalry in international markets (Tiessen et al. 2001). Following the IO framework, where it is stated that external market and industry structure determines a firm’s strategy, this research will explore the external environmental determinants related to development of export market ecommerce infrastructure and demand for e-commerce from parties involved in export business, and also measure their impact on the firm’s export marketing strategy. Export market e-commerce infrastructure constraints are present in every export market to varying degrees, but are less pronounced in the most developed markets. Much of the economic value of e-commerce can be derived if underlining technology platforms and the protocols for connecting and exchanging information and products are established. If exporters want to exploit the full potential of e-commerce, it is vitally important that an export market has developed e-commerce infrastructure with easy and affordable access to e-commerce networks. Powerful importing customers are in an advantageous position for implementing an e-commerce based export process because of their dominant position to coordinate and to some extent dictates channel activities or exert influence on exporters to adopt such a process. Therefore, demand for e-commerce development puts pressure on exporters to develop e-commerce business tools.

2.2.3 The resource-based view theory (RBV)

In contrast to IO theory, the RBV considers a firm’s internal organisational resources (assets, capabilities, processes, managerial attributes, information and knowledge) to explain its strategy and performance (Wernerfelt 1984; Barney 1991; Collis 1991; Deligonul and Cavusgil 1997). The term “resources” is used in a broad sense in RBV studies. Porter (1991, 1996), for example, argues that the most critical resources are those that are superior in use, hard to imitate, difficult to substitute, and more valuable within the firm than outside. Following this line of reasoning, it implies that the differential benefit of strategic resources among firms is the ultimate determinant of their performance (Wernerfelt 1984; Barney 1991; Grant 1991). For that reason, internal organisation resources are considered by some to be the principal determinants of export performance (Zou and Stan 1998).