E-business tools adoption and export performance: Empirical evidence from Croatian companies.

• Author: Simic, Mirna Leko

INTRODUCTION

Exports play a significant role in the development process. Many governments, in both developed and developing economies, adopt an export-led growth strategy implementing different policies that stimulate exports. International competitiveness that is often a result of such strategies is perceived to be a key development trigger. The significance of exporting activities from both an academic and professional point of view is clearly undeniable (Gregory, Ngo, & Karavdic, 2017; Leonidou & Katsikeas, 2010).

Globalization and trade liberalization processes in recent decades have enabled not only large multinational corporations but also small and medium-sized enterprises (SME's) to compete globally (Spyropoulou, Skarmeas, & Katsikeas, 2010). Increasing numbers of companies globally take part in international trade activities. Their success in international markets can be measured and analyzed in different ways, and one of the most frequently used measures is export performance, which will be used in this research paper.

A number of authors and studies in the last few years have emphasized the importance of ICT (information and communication technologies) and e-business tools implementation in improving overall business performance (Taylor, 2015; Roztocki & Weistroffer, 2015; Gallego, Gutierrez, & Lee, 2014; Schlichter & Danylchenko, 2013; Voola, Casimir, Carlson, & Agnihotri, 2012; Bordonaba-Juste, 2012;) as well as exports (Makanyeza & Ndlovu, 2015; Lal, 2002; Sorensen, 2006; Sheikh, Shahzad, & Ishak, 2016; Alarcon-del-Amo, Rialp, & Rialp, 2016, and others).

This study seeks to examine the empirical link between e-business tools adoption and export performance in Croatian exporting companies. With the aim of identifying key relations between the two constructs, 111 Croatian exporters were included in the study. Different aspects of e-business tools adoption--e-mail usage, internet usage in market research, promotion, e-commerce, and e-payment possibilities were used. Export performance was measured through the export/total business ratio, the export/total revenue ratio and the existence of multilingual official websites.

The research was conducted on a sample of 111 Croatian exporters. To the best of our knowledge, no such research has been conducted either in Croatia or in any of the transition economies in Central and Eastern Europe, which all, more or less, represent developing economies in the European context. We presume that our research results are, to a certain extent, representative for most of those countries too and, therefore, may serve as an indication or a broad reference when comparing to similar economies in terms of market maturity, market size, ICT adoption, and other market attributes.

The paper is structured in the following way. In the introduction section, we describe the purpose and major elements of the research; in theoretical background, we identify key features of two concepts we have researched: ICT along with e-business tools adoption and export performance. The third part of the article is a review of the state-of-the-art of Croatian exports and e-business tools adoption, based on secondary research. The fourth part of the paper explains research methodology and the fifth provides research findings and a discussion. The last part of the paper provides the conclusion with major research findings. Furthermore, a critical overview of the most important research limitations is provided and future research proposal guidelines are included as well.

THEORETICAL BACKGROUND

ICT is a broad term that includes computerized information and communication technologies such as computers, handheld devices, wired or wireless technologies, and business productivity software. It represents an integration of information, computers, and communication (Ashrafi & Murtaza, 2008; Ghalandari, 2013).

On a global level, ICT is creating a stimulus and a platform for best practice sharing in all areas of life (Schlichter & Danylchenko, 2013) and has evidently "revolutionized and expanded horizons" of many business-related activities (Gosavi, 2017). ICT empowers the potential to contribute significantly to economic growth (Taylor, 2015) as it plays a vital role in simplifying business processes and contributes to the improvement of the competitive market presence of companies in various sectors alike. Bordonaba-Juste (2012) suggested that the usage of ICT implies changes in the companies' strategy, management, and marketing activities. The ICT contributions to business performance most often mentioned in the literature are non-price competitive elements like product design, marketing, after-sales support, office automation, CRM, SCM and others (Lal, 2004). In addition, Damaskopolous and Evgeniou (2003) and Drew's (2003) research results indicate that ICT also facilitates cost reductions, especially in communication, market research and promotion. All of these findings illustrate the significant contribution of ICT to the international business development of companies.

From a resource-based view, ICT adoption is perceived as a valuable intangible resource that contributes to company innovativeness and competitive advantage (Arcopal-del-Amo, Rialp, & Rialp, 2016) as well as productivity and profitability (Taylor, 2015).

Roztocki and Weistroffer (2015) focused on ICT adoption in transition economies. Results from their study revealed that the use of ICT in transition economies "mirrors the transition in the business environment," indicating that significant changes affected entire economies. In addition, they concluded that the early transition phase in Central and Eastern European countries is characterized by a jump in the adoption of ICT. However, evidence shows that business results often failed due to unrealistic expectations and a lack of fundamental understanding of technological possibilities along with market attributes. Later on, companies recognized the need for new approaches to ICT adoption in order to support new e-business models. In addition, there is evidence that some transition economies are increasingly using ICT for strategic purposes.

Furthermore, Gallego et al. (2014) explored the adoption and usage of ICT in manufacturing companies based on a large-scale study in Colombia. Results showed that ICT technology adoption is better facilitated in companies that are relatively large, have large human capital, engage in more innovative activities, and align their organizational structure with the given technology in order to maximize the potential. Mori and Munisi (2012) concluded that if SMEs were to use ICT efficiently, their export performance would most likely improve due to specific technology features that empower extension to the international market.

The level of ICT adoption in a company can be measured in several ways. In this research, we use the partial OECD e-commerce maturity model (OECD, 1999). The model considers three stages for the diffusion of ICT: readiness, defined as an ability to use ICT; intensity, that measures the state of specific ICT applications, primarily e-business tools; and impact, that relates to ICT effects on a company's performance (Mata & Quesada, 2015). Our research uses measures of readiness and implementation and tries to investigate the impact of e-business tools usage on a company, i.e. its export performance.

Export performance reflects the outcomes of export behavior. It represents a degree in which companies achieve their strategic and financial objectives by exporting (Cavusgil & Zou, 1994) and, as such, serves as a basic tool of evaluation of a company's success in foreign markets (Diamatopoulos, 1998). However, it is a complex construct, with no consensus of its determinants. There is a huge variety of different approaches to export performance measurement. According to Chen, Sousa and He (2016) export performance has received increasing attention over recent decades, but the area is still characterized by fragmentation and diversity hindering theoretical and practical development. Madson and Moen's (2018) study identifies 53 different measures of export performance that have been used in recent studies. Aaby and Slater (1989) mention two of the most widely used approaches to measuring export performance: separation of exporters and non-exporters as the first, and rate of growth in export sales and the exports in total sales ratio as the second approach. Shoham (1998) summarized previous studies on export performance and created a model consisting of export sales, export profitability and performance change, as complex dimensions of export performance. Chen, Sousa and He (2016) analyze internal factors (company characteristics, product characteristics, competencies, management attitude, and perception) and external factors (industry characteristics, domestic and foreign market characteristics) as determinants of export performance. Katiskeas, Leonidou and Morgan (2000) discuss export performance as three groups of measures: economic (sales-related, profit-related and market share-related measures), non-economic (product-related, market-related and miscellaneous-related measures) and generic (perceived export success, achievement of export objectives, satisfaction with export performance, and strategic export performance). Several authors focused on specific internal and external export barriers over the internationalization process (Wasowska, 2016; Cahen, Lahiri, & Borini, 2016; Narayanan, 2015; Kahiya, 2013; Ojala & Tyrvainen, 2007). Zou, Taylor, and Osland (1998) have developed the EXPerf scale that measures three dimensions of export performance: financial, strategic and satisfaction with export. It is widely used in research. Two more scales were developed aiming at optimizing the measurement of export performance: the STEP scale (Lages & Lages, 2004) was developed for purpose of measuring short term export performance...