Asset specificity and capability of e-Trade performance: evidence from Korea

Purpose – E-Trade (paperless trade or cross-border e-commerce in B2B format) does not necessarily show positive results. The purpose of this paper is to conceptualize why and how such happens and furthermore, has two research purposes. First is to explain why studies in e-Trade performance show controversial results, such as some showing positive while others are not. Second is to investigate the relationship among research constructs such as e-Trade benefits, e-Trade use, asset specificity, and exporting firm’s capability. Design/methodology/approach – This study considers multiple dimensions and evolutionary perspective of e-Trade performance. Structural equation model adopts the measures of firm’s capability, e-Trade use, and benefits to analyze e-Trade performance. Performance was divided into organizational net benefits (ONB) and industrial net benefits. Several hypotheses were suggested to test the relationship among the variables in the model. Basic moderator effect represented as an interaction between asset specificity and other constructs. In total, 295 exporting firms have participated in the survey and their responses were utilized for analysis. Findings – This study shows that e-Trade performance should consider maturity as well as multiple stages among constructs. Critical paths were found among capability factors, process use (PU), ONB, and asset specificity. Results also show that information capability and marketing capability (MC) are determinant factors on e-Trade performance. In addition, MC and level of PU are read to be determinant factors of ONB. Furthermore, small and medium-sized enterprises’ (SMEs’) asset specificity, with level of capability and e-Trade use moderates their e-Trade performance. Research limitations/implications – Asset specificity of SMEs has to be managed in a positive direction. Government’s e-Trade supporting programs for SMEs should be transformed in a way that can foster the growth of capability and self-sustainment. It reads to be inevitable to amend the current characteristics of e-Trade services. Furthermore, developing a specialized e-Trade service for large firms will also be in need. And utilizing exporting firm’s financial data would be more advisable testing the hypotheses. Originality/value – Most works in information system as well as in e-Trade area report controversial performance results and this paper suggests an alternative model by combining asset specificity into capability and e-Trade use. Study on e-Trade performance is complicated and needs to consider multiple dimensions as well as their stages. This study envisions firm’s capability, asset specificity and at the same time contributes in e-Trade benefits.