Organizational Influences and Performance Impact of Cross-Border E-Commerce Barriers: The Moderating Role of Home Country Digital Infrastructure and Foreign Market Internet Penetration.

VerfasserEduardsen, Jonas

1 Introduction

Advancements in information and communication technologies (ICTs) have changed the way firms conduct their business in foreign markets, and e-commerce now represents an important channel for many companies seeking to expand into international markets. For example, companies can now sell their goods abroad directly via their own online presence. However, this may require companies to invest in some localization of their online presence to match the local culture, language, and preferences (Yamin & Sinkovics, 2006). Alternatively, companies can utilize digital platforms with global presence, which act as electronic intermediaries (e-intermediaries) that provide matching, information, promotion, and market research functions (Qi et al., 2020). These digital platforms can facilitate international sales by increasing firms' visibility in the global market and reducing both transaction and search costs for the firm via effective mechanisms for matching buyers and sellers (Cho & Tansuhaj, 2013; Shaheer et al., 2020).

The above developments have given an impetus to many firms to use these technologies to sell their goods and services in export markets (Javalgi et al., 2012). It has also helped firms to circumvent the inhibiting role of traditional export obstacles, such as those pertaining to the location and analysis of foreign markets, the identification of overseas opportunities, and the communication and interaction with customers abroad (Katsikeas et al., 2019). As a result, scholars have highlighted the importance of e-commerce as a powerful entry mode to help firms overcome both physical and managerial barriers to internationalization (Jean & Kim, 2020).

Although in the last few decades, the CBEC phenomenon has attracted voluminous research investigating various aspects of it, such as the internationalization process of e-commerce firms (Hanell et al., 2019), the effect of e-commerce adoption on firm internationalization (Tolstoy et al., 2016), and the motivations for using e-commerce as a new method to entering foreign markets (Qi et al., 2020), there is limited research focusing on CBEC barriers (Gomez-Herrera et al., 2014; Hazarika & Mousavi, 2022; Morgan-Thomas & Bridgewater, 2004). More importantly, there is still little understanding about the role of organizational factors in determining the magnitude of these CBEC barriers and their implications on the firm's online export performance.

Shedding light on CBEC barriers is necessitated by the fact that there appears to be a disagreement within the literature about their relevance and importance, with some scholars (e.g., Cahen & Borini, 2020; Hanell et al., 2019) arguing that CBEC provides a cost-effective foreign market entry mode that helps to remove most barriers, while others (e.g., Elia et al., 2021) suggest that CBEC introduces several complexities that combine the barriers of e-commerce with those of international business. Hence, while some barriers may be less important in CBEC, other barriers may remain equally important or become even more severe compared to traditional exporting. As a result, our knowledge about the challenges related to CBEC is still sparse, which warrants attention due to the serious effects that these may have on export performance (Cassia & Magno, 2022; Jean & Kim, 2021).

Our study aims to address this void in the literature by examining the organizational determinants and performance implications of CBEC barriers. Specifically, we have three major objectives to accomplish: (a) to explore the role of firm size, business experience, and business group affiliation on the perceived severity of barriers experienced by firms when conducting CBEC; (b) to investigate the effect of different CBEC barriers on the firm's online export performance; (c) to examine the moderating role of the exporting country's level of digital infrastructure and host country's Internet penetration on the effect of CBEC barriers on online export performance.

This study contributes to the international business literature in four ways. First, we identify and highlight the important role of a new set of barriers confronted by firms engaged in CBEC, since this provides a distinct foreign market entry mode with its own unique opportunities and challenges (Yamin & Sinkovics, 2006). These barriers may differ in many aspects from those already known in traditional exporting, due to the inexistence of temporal and spatial limitations in CBEC, and therefore requiring a different handling approach (Leonidou, 2004). In fact, some of the barriers connected with traditional exporting may not be applicable at all in the case of CBEC, while others may have a negligible impact.

Second, we provide insights into the role of specific organizational factors associated with problems encountered in CBEC, which are virtually absent to date (Gabrielsson & Gabrielsson, 2011). Adopting a Resource-based view perspective, we specifically examine three antecedent factors--firm size, business experience, and business group affiliation--that influence the extent to which resources are constrained for exporters and are likely to exacerbate the influence of CBEC barriers in their export operations (Xie & Suh, 2014). This will provide useful input to the current ongoing debate about the importance and severity of online export barriers in especially resource-constrained firms (Jean et al., 2020; Ma et al., 2022; Yan et al., 2022).

Third, although some studies (e.g., Jean & Kim, 2020; Moen et al., 2008; Sinkovics et al., 2013) have explored the impact of e-commerce on firm internationalization and export performance, there is still limited knowledge about why firms engage in CBEC with varying degrees of success (Morgan-Thomas, 2009; Paul et al., 2017). In response to this, we provide evidence regarding the detrimental role played by specific barriers associated with CBEC in the firm's export activities and consequently on its online export performance. A clear understanding of the harmful effect of different types of CBEC on performance, would help exporting firms to prioritize measures to alleviate them.

Fourth, we emphasize the contingent effect of factors external to the firm in moderating the impact of CBEC barriers on the exporting firm's success (Krishnamurthy & Singh, 2005; Rothaermel et al., 2006; Schu & Morschett, 2017). Specifically, we throw light on how two key contextual factors--the home country's digital infrastructure (e.g., availability and affordability of ICT infrastructure and networking, online payment systems, technical skills) and the foreign market's Internet penetration rate--can strengthen or weaken the negative effect of CBEC barriers on the firm's online export performance, stressing in this way the importance of both the home and host country's institutional environment in international business activities.

The remainder of this article is organized as follows: We first review the literature on the opportunities and challenges associated with CBEC, as well as on the nature and types of CBEC barriers. This is followed by an explanation of the theoretical background of our study. We then present our conceptual model and develop the research hypotheses. The next section explains methodological issues regarding the study conducted. We then proceed with an analysis of the data collected and provide the results of testing the hypotheses. This is followed by a discussion of the research findings and a presentation of the theoretical, managerial, and public policy implications. In the final section, we explain the limitations of our study and provide suggestions for future research.

2 Literature Review

2.1 Cross-Border E-Commerce: Opportunities and Challenges

E-commerce is broadly defined as "an environment for presenting, trading, distributing, servicing customers, collaborating with business partners, and conducting transactions using electronic technologies" (Gregory et al., 2007, pp. 31-32). This definition, however, captures many activities that do not fall under the definition of e-commerce used in this study, where e-commerce refers to the process of selling and buying via the company's own website, a site within a third-party marketplace platform, or through electronic data interchange (EDI) (Tiessen et al., 2001). Thus, we focus on the transaction as the defining characteristic and not on the product characteristics or the mode of delivery. This implies that e-commerce can include digitally enabled transactions of both goods and services that can be digitally or physically delivered.

CBEC refers to "a cross-border trade completed between different countries via e-commerce" and represents an alternative model integrating both e-commerce and international trade (Qi et al., 2020, p. 50). Previous studies recognize CBEC as a new mode of entry into international markets, "where the 'crossing' of national boundaries takes place in the virtual rather than the real or spatial domain" (Yamin & Sinkovics, 2006, p. 359). CBEC presents several opportunities for firms seeking to expand their business abroad. According to previous studies (e.g., Luo et al., 2005), CBEC is subject to fewer physical barriers in transcending national borders and is less costly compared to traditional exporting. Thus, e-commerce has lowered the costs of internationalization and, consequently, the barriers to internationalization. For example, today firms can use online e-commerce platforms to facilitate the cross-border exchange of goods and services over the Internet. These online platforms provide several mechanisms that can facilitate CBEC, such as order fulfilment, customer services, and Software-as-Service offerings. Thus, online platforms reduce frictions, including both transaction and search costs for both buyers and sellers by providing matching mechanisms that enable them to find each other.

CBEC also poses several challenges and risks for firms...

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