How Do Competitive Environments Moderate CRM Value?

Decision Support Systems, 2013

43 Pages Posted: 20 Sep 2008 Last revised: 7 Jul 2015

See all articles by Alfred Z. Liu

Alfred Z. Liu

McMaster University

Hongju Liu

Peking University - Guanghua School of Management

Sean Xu

HKUST Business School

Date Written: November 11, 2012


Customer relationship management (CRM) plays a critical role in e-business. In this study we seek to quantify the value of Internet-based CRM applications, and the purpose of our research is to identify the mechanisms underlying CRM value creation. Using a unique dataset collected from vendor archives of CRM implementations, we find an increase in firm value associated with CRM applications. This value implication, however, is attributable to integration of CRM with existing enterprise resource planning (ERP) applications, instead of installing CRM functional modules per se. Further, we find that the integration contributes more value in markets featuring higher product differentiation or lower entry costs. Together these findings shed light on the mechanisms through which CRM applications increase firm value in specific competitive environments.

Keywords: E-business, customer relationship management, competitive environments, business value, enterprise resource planning, integration, product differentiation, entry costs

Suggested Citation

Liu, Alfred and Liu, Hongju and Xu, Sean, How Do Competitive Environments Moderate CRM Value? (November 11, 2012). Decision Support Systems, 2013, Available at SSRN: or

Alfred Liu

McMaster University ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4

Hongju Liu

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871

Sean Xu (Contact Author)

HKUST Business School ( email )

Clear Water Bay
Hong Kong

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