The Adoption of Business-to-Business E-Commerce: Empirical Evidence for German Companies

Although in its infancy, one promising application of Internet technology for firms is so-called Internet commerce or electronic commerce. This paper analyses the determinants of B2B (business-to-business) adoption borrowing from the literature on the adoption of new technologies and considering factors like firm size, corporate status, human capital and international competitive situation. An ordered probit model is applied to a data set containing about 3,000 enterprises from the German manufacturing industry and the German services sector in the year 2000. We find positive and significant effects of firm size, the share of highly qualified employees and the export share. An IT-intensive production process enhances the probability of a broad use of B2B e-commerce. An important influence on the use of B2B is the bandwagon effect, implying that firms are more likely to use this new Internet application if others within the same industry likewise do it. We find no significant effects of firm age and of the fact that a firm belongs to a group of companies as measures of a firm’s flexibility and financial power. Helpful suggestions by Horst Entorf, Avi Goldfarb as well as other participants of the ZEW– conference on the ‘Economics of Information and Communication Technologies’, Mannheim, June 18–19, 2001, are gratefully acknowledged. We thank Ramona Hönicke and Friedhelm Sauer for competent research assistance. ∗Corresponding author: Centre for European Economic Research, Research Group Information and Communication Technologies, P.O. Box 103443, D–68034 Mannheim, Germany, email: [email protected]. ∗∗Centre for European Economic Research, Department of Industrial Economics and International Management, P.O. Box 103443, D–68034 Mannheim, Germany, email: [email protected].