The Role of Economic Development and Firm Internationalization in Internet Business Practices

Abstract

Firms from emerging economies are rapidly becoming formidable competitors to established industry leaders from developed economies. Aside from anecdotal reports, there is little scholarly evidence concerning the operational details of how emerging economy firms are becoming competitive with developed economy firms. This article addresses the gap by building on the International Business, Strategy and Information Systems literature, and through an empirical analysis of original survey data for 468 firms across ten countries. We develop three primary empirical findings. First, despite the differences between emerging economy firms and developed economy firms, we find that emerging economy/high internationalization firms use marketing- and supply chain-oriented Internet business practices with about the same frequency as developed economy/high internationalization firms. Second, we find that emerging economy/high internationalization firms are more driven than developed economy/high internationalization firms to use Internet business practices to expand existing markets and enter new markets. Third, we find that emerging economy/high internationalization firms report relatively higher sales and customer service impacts from Internet business practices than do developed economy/ high internationalization firms. These findings suggest that emerging economy firms have used the Internet as a resource to position themselves as credible competitors to developed economy firms.

Keywords: Internet, International, Adoption, Success, It Strategy, It Business, Survey, Case Study, Organization, Inter-Organizational Systems