Jap Efendi
Texas A&M University
Murphy Smith
Texas A&M University
Abstract: This study examines financial performances of business-to-business (B2B) buy-side e-commerce adopters. Increasing corporate investment in B2B e-commerce warrants empirical assessment of the impact on corporate performance. This study empirically investigates whether adoption of B2B buy-side for operating input, a subset of B2B e-commerce, has a positive impact on the adoptersÂ’ profitability. A sample of 42 adopters and matched non-adopters are identified from the period 1997 to 1999, the most currently available data. Analysis shows that adopters outperform their non-adopting industry peers in the post-adoption period. Higher performance in adopters' return on assets (ROA) is driven by an increase in profit margin rather than asset turnover. More importantly, higher performance by adopters results from lower cost of goods sold and lower selling and general administrative expenses. Thus, the results are consistent with the claim that B2B buy-side improves company performance through lower purchasing and administrative costs.
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