INTRODUCTION
The research results presented in this paper are based on a survey conducted by the Center for 
Research on Information Technology and Organizations (CRITO) at the University of California 
at Irvine, in conjunction with the International Data Corporation (IDC). Aside from Germany, 
the survey participants include Brazil, China, Denmark, France, Japan, Mexico, Singapore, 
Taiwan and the United States. The focus of the research is to identify the degree of e commerce 
technology diffusion and usage in each of these countries together with the impact of e 
commerce on industry, as well as society. The different diffusion paths in the studied industries 
seem to be intertwined with the extent of acquired ICT (Information and Communication 
Technology) over time, but also with differences in national mentalities such as openness to 
innovative technologies, general adoption behavior or consumer preferences. Phenomena of path 
dependencies are known from the network effect theory for network effect goods such as e 
commerce and related technologies. Therefore, the varying usage of e commerce technologies in 
the three studied sectors is partly based on the different usage of IT and computer technologies in 
the past. While the manufacturing, as well as the banking/insurance sectors have traditionally 
used ERP systems, EDI data conversion or management information systems, the retail and 
wholesale sector started using such technologies rather late, yet, at the same time, began with the 
implementation of e commerce technologies. Accordingly, data processing has, on average, a 
more sophisticated reputation in the first two sectors (manufacturing and wholesale/retail 
distribution) in comparison to the latter (banking/insurance). 
The usage of e commerce is not an end in and of itself. E commerce is implemented to reduce 
costs, to improve internal and external processes and/or to enter new markets. It may be used as a 
substitute to existing products, distribution channels or business processes but also as a 
complementary product or service. Knowledge about the different ways of using e commerce 
together with the degree of e commerce implementation may help to answer the question as to 
how innovation friendly and future oriented a nation's economy is and how competitive it may 
be in the future.
In the following section, we present a short introduction to the German economic situation, make 
a few statements about drivers and inhibiters of e commerce, as well as the impact of e 
commerce on industry itself. We conclude by offering four propositions.  
Subsequently, we describe the research results for Germany at the country and industry levels. In 
addition, we provide benchmark data for Germany vis a vis other participating European 
countries, specifically Denmark and France, as well as the US. For a more detailed discussion of 
the influence of e commerce on the efficiency of firms, a Data Envelopment Analysis (DEA) is 
used. Moreover, an analysis of the impact of strategic versus non strategic usage of e commerce 
is provided. We conclude by presenting the most essential findings and answers to the 
underlying questions pertaining to the four propositions. 
BACKGROUND AND A PRIORI EXPECTATIONS 
Germany has silently become something like a European e commerce power house. After the 
first five years of unification, Germany's interest and politics were focused on rebuilding the 
East German infrastructure to bring the new local states to internationally comparative levels and 
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