A Transaction-Efficiency Analysis of an Internet Retailing Supply Chain in the Music Cd Industry

Decision Sciences, Vol. 34, No. 1, pp. 131-172, 2003

Posted: 28 Nov 2006

See all articles by Joseph Bailey

Joseph Bailey

University of Maryland

Elliot Rabinovich

Arizona State University - W.P. Carey School of Business

Abstract

The emergence of the Internet may have fundamentally altered the mechanisms underlying information exchanges between sellers and end consumers. However, little attention has been given to the impact these mechanisms have on the efficiency of supply chain operations.

This paper begins to address this deficiency in the literature by evaluating supply chain transaction efficiency effects from Internet purchases by consumers. It develops and empirically tests a theoretical framework examining the role Internet purchases have in establishing transaction-efficiency levels in product exchanges involving sellers, placed at different supply chain echelons, and consumers. The theoretical framework integrates the Transaction-Cost and Internet Economics, Inter-Organizational Information Systems, and Supply Chain Management literatures. Empirical testing, via structural equation modeling, is based on archival data in the Internet music-CD market.

The results show that Internet-mediated purchases by consumers allow for greater transaction efficiencies when inventory ownership is postponed further upstream in the supply chain and supply chain echelons are disintermediated. The results also indicate that channel structure configuration, defined by the supply chains' Internet retailing echelon, moderates these transaction efficiency effects.

Keywords: Supply Chain Management, Electronic Commerce, and Structural Equation Models

JEL Classification: D23, C93

Suggested Citation

Bailey, Joseph and Rabinovich, Elliot, A Transaction-Efficiency Analysis of an Internet Retailing Supply Chain in the Music Cd Industry. Decision Sciences, Vol. 34, No. 1, pp. 131-172, 2003, Available at SSRN: https://ssrn.com/abstract=947388

Joseph Bailey

University of Maryland

College Park
College Park, MD 20742
United States

Elliot Rabinovich (Contact Author)

Arizona State University - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
1,424
PlumX Metrics