The Adoption Rate of E-commerce in the U.s. and Italian Construction Markets: Some Reasons for Its Variability

There is evidence that the adoption rate of e-commerce applications in the US construction market varies widely, notwithstanding their potential benefits. This paper focuses on some of the reasons behind the varying approaches of construction firms to adopting a set of these technologies. The study first addresses two main determinants of the production arrangements by firms: the cost of production inputs and the cost related to their coordination, namely the exchange of their information and knowledge content. Then, it illustrates the main tasks that encompass the purchasing process of production inputs. Successively, three main hypotheses concerning the possible use and impact of e-commerce applications on the operations of firms are proposed. In the hypotheses the construction industry’s varying approaches to these technologies is explained according to variables such as the nature of the business transaction under consideration, the size of the buying firm, and type of market situation. The hypotheses are tested through a questionnaire survey that was administered to three large samples of US and Italian contractors. The samples included large, medium and small firms that operate in building and non-building construction. The results of the survey appear to confirm the initial hypotheses. The adoption rate of e-commerce applications varies according to the nature and phases of the transaction process, type of production inputs as well as size and type of construction firm.