Cost Focussed Firms and Internet Usage

Melbourne Institute Working Paper No. 29/02

Date: December 2002


Joanne Loundes


This paper looks at Internet usage by Australian firms that have a cost focussed competitive strategy. The data source for this analysis is the Melbourne Institute Business Survey, conducted by the Melbourne Institute of Applied Economic and Social Research. The survey was conducted in late 2001, and targeted large Australian firms. Instrumental variables estimation found that cost-focussed organizations utilised the Internet more intensively for both internal organizational activities and external market activities than organizations that did not have a high focus on costs. However, this impact appeared greater for internal organizational activities, suggesting that these firms possibly believed that there were greater cost savings and efficiency gains-at least in terms of Internet usage-to be had in using the Internet as part of the internal operations of the organization.

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