The Impacts of Electronic Collaboration and Information Exploitation Capability on Firm Performance

This study focuses on electronic collaboration based on inter-organizational information systems (IOIS), particularly between dominant buyers and their suppliers. From the suppliers’ perspective, we examine ways to achieve higher performance by increasing the extent to which they proactively participate in business activities using IOIS. We propose that electronic collaboration consists of two major activities: electronic information sharing (EIS) and electronic cooperation (ECo). This study investigates the extent of EIS and ECo that suppliers contribute to their development of information exploitation capability (IEC), which enables them to internally utilize information and knowledge created from electronic collaboration. In addition, we test the effects of electronic collaboration activities and IEC on firm performance. We collected surveys from 169 firms and used Structural Equation Model analysis. We found that EIS and ECo are major sources to develop IEC, and that both ECo and IEC lead to improved company performance.