Countries all around the world have been actively building infrastructure for e-trade as part of their national e-business initiative. In case of the Korean government in particular, the country has invested 30 billion Korean Won in establishing an in...
Countries all around the world have been actively building infrastructure for e-trade as part of their national e-business initiative. In case of the Korean government in particular, the country has invested 30 billion Korean Won in establishing an integrated archive for e-trade documents, networks for each trade process, e-trade platforms, and etc. as of the year 2007. Such proactive investments in building e-trade infrastructure have facilitated business firms to make greater use of e-trade and to improve their management performance. These initiatives have ultimately played a key role in enabling Korea to step up as a leader in e-trade.
Since continued investments in e-trade infrastructure can only be made when there are noticeable results from individual firms and at the national level, scholars have been keenly interested in studying the outcome of e-trade. Existing studies have evaluated e-trade performance at different levels, either namely national level or firm levels. But there are few studies to determine explaining whether or not the e-trade performance of individual trade firms may bring about enhanced e-trade performance at the macroeconomic level. The focus of this research is to figure out determinant factors what can explain the e-trade performance of individual trade firms.
Comprehensive literature surveys were made in the e-trade performance area. Through this process, the following factors were extracted as preceding variables influencing e-trade performance: coordination cost, monitoring cost, physical asset specificity, human asset specificity, information capability, and global capability. To evaluate these levels, the usage factor is decomposed into its scope and levels. The economic and competitive advantage performances were used to identify the level of e-trade performance.
Based on the survey collected from the samples of 266 trade firms, their data reliability and validity were tested by using explanatory factor analysis, Cronbach's alpha coefficient, confirmatory factor analysis, and correlation analysis. The structural equation model(SEM) analysis, developed using LISREL 8.72, was performed to test the relationship among propose research models.
Through the statistical analysis of survey results, it has been found that human asset specificity and information capability are factors influencing e-trade usage level while human asset specificity, information capability and global capability influence e-trade performance level.
The results of this research prompts the following suggestions. First of all, it is important to develop and promote e-trade related services that support the overall e-trade process like uTradeHub. In addition, efforts should also be given to expand the use of e-trade through inter-organizational systems.
Second, it should be noted that strategic use of e-trade system for integration of human resources and processes is equally important as processing trade documents online.
Third, it is essential for firms to enhance their capacity in collecting and producing quality information and to cultivate mindsets and perspectives that are sensitive to changes and trends in the global market. Firms that deliver outstanding levels of performance using e-trade shall be ones equipped with essential capabilities meeting the needs and demands of the 21st century, an era of unprecedented globalization.
While these suggestions may contribute to setting the strategic direction to vitalize e-trade in Korea, this study has the following limitations. One of such limitations is that because the measurement of e-trade usage level and performance variables relied upon the subjective appraisal of survey respondents. The survey results are depending upon cognitive understanding of the situation by the respondent at the time of survey. The other limitation lies in the narrow choice of measuring tools to evaluate costs involved in trade and competence in utilizing e-trade. This paper uses coordination and monitoring costs as transaction cost variables. And the physical asset specificity and human asset specificity are found to be significantly important. But there may exist other variables that offer more detailed explanation about their influences on e-trade performance level. Since most variables proposed in this paper would not provide comprehensive picture of e-trade performance, It is suggested that other competence variables besides the information and global capabilities should also be studied to measure e-trade capability.