Information technology payoff in E-Business environments: An international perspective on value creation of E-Business in the financial services industry

Kevin Zhu, Kenneth L. Kraemer, Sean Xu, Jason Dedrick

Research output: Contribution to journalArticlepeer-review

577 Scopus citations


Grounded in the technology-organization-environment (TOE) framework, we develop a research model for assessing the value of e-business at the firm level. Based on this framework, we formulate six hypotheses and identify six factors (technology readiness, firm size, global scope, financial resources, competition intensity, and regulatory environment) that may affect value creation of e-business. Survey data from 612 firms across 10 countries in the financial services industry were collected and used to test the theoretical model. To examine how e-business value is influenced by economic environments, we compare two subsamples from developed and developing countries. Based on structural equation modeling, our empirical analysis demonstrates several key findings: (1) Within the TOE framework, technology readiness emerges as the strongest factor for e-business value, while financial resources, global scope, and regulatory environment also significantly contribute to e-business value. (2) Firm size is negatively related to e-business value, suggesting that structural inertia associated with large firms tends to retard e-business value. (3) Competitive pressure often drives firms to adopt e-business, but e-business value is associated more with internal organizational resources (e.g., technological readiness) than with external pressure to adopt. (4) While financial resources are an important factor in developing countries, technological capabilities become far more important in developed countries. This suggests that as firms move into deeper stages of e-business transformation, the key determinant of e-business value shifts from monetary spending to higher dimensions of organizational capabilities. (5) Government regulation plays a much more important role in developing countries than in developed countries. These findings indicate the usefulness of the proposed research model and theoretical framework for studying e-business value. They also provide insights for both business managers and policy-makers.

Original languageEnglish (US)
Pages (from-to)17-54
Number of pages38
JournalJournal of Management Information Systems
Issue number1
StatePublished - 2004
Externally publishedYes


  • Business value
  • Cross-country comparison
  • Electronic business
  • Electronic commerce
  • Financial services industry
  • Firm performance
  • Information technology investment
  • Technology diffussion
  • Technology-organization-environment frame work

ASJC Scopus subject areas

  • Management Information Systems
  • Computer Science Applications
  • Management Science and Operations Research
  • Information Systems and Management


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