E-commerce and Export Performance By Munib Karavdic

In the case of export internationalisation models, Andersen (1993) suggests that in general terms, models developed in previous studies have tended to fall into one of two categories: (a) the establishment chain and (b) the innovation-related models. Andersen (1993) points out that several models are similar, and differences tend to be in the number of stages and the terminology used to describe them. A more integrated, but again largely marketing / distribution view of firm internationalisation, has emerged from network studies that identify reciprocity between inward and outward activities and advance an evolutionary expansion path based on interaction and relationships between buyers and sellers, including export and import intermediaries (Welch 1992).

Recent evidence indicates that small firms, especially those that apply e-commerce technology, internationalise rapidly and may be involved in cross-border business activities in several countries simultaneously (Hamill and Gregory 1997; Crick and Jones 2000; Prasad et al. 2001; Petersen et al. 2002). Such evidence suggests that the limited resources of small firms are no longer the constraining factor they once were. Some small firms have the competence, capability, and experience necessary to operate internationally from early on in their development. These firms are known as born global companies (Knight and Cavusgil 1996). Strategy and proactive involvement of small firms applying e-commerce and their attitudes to international expansion and competition are therefore important dimensions of their internationalisation.

The use of e-commerce for export business enables firms to skip some of the conventional stages of internationalisation because it alleviates some geographical constraints and allows, to some extent, direct and immediate foreign market entry (Bennett 1997). Hamill and Gregory (1997), for example, state that the Internet can substantially improve communications with existing foreign customers, suppliers, agents and distributors, identify new customers and distributors, and generate information on market trends and on the latest technical developments. Similarly, the Internet enables small firms to grow without expanding physically and allows them to advertise and promote themselves globally at minimal cost (Maloff 1995). Such considerations raise the possibility that the availability of the Internet removes a number of the organisational and resource constraints usually associated with exporting (Bennett 1997).