Factors in Taiwanese firms' decisions to adopt electronic commerce: An empirical study

This paper has established an empirical model to look at organisational adoption of e-commerce. The model, which examines cost-effectiveness, organisation and pressure caused by the external environment, reveals that the decision to adopt e-commerce is a kind of investment, in which both cost- effectiveness and risks (environmental and organisational factors) are evaluated. A number of factors involved in a firm's decision to adopt e-commerce are also discussed, such as perceived costs, perceived benefits, readiness, product variety, exchange risk, competitive pressure and customer demand. With no setting of scale type as interval or normal distribution, the results of the model estimation show that perceived costs, perceived benefits, readiness, product variety, exchange safety and competitive pressure have a significant impact on the decision to adopt e-commerce.10 In other words, these factors function as variables in the decision-making process. Since firms regard the adoption of e-commerce as an economic investment, their concerns over the benefits and costs brought about by their decisions are indeed significant. The study also shows that firms with higher readiness take fewer risks and that those with greater product variety can reap greater rewards in terms of economies of scope, thus they are more likely to adopt e-commerce. In addition, the more intense the industrial competition, the more rapid will be the development of e- commerce. The government has also helped in the development of e-commerce in Taiwan through the establishment of appropriate laws and regulations.