The Effect of Network Exposure on the Diffusion of Enterprise System

Abstract

This paper uses the diffusion of innovations in a network context to try to explain the massive adoption of enterprise systems in the automotive industry. We argue that a firm's decision to choose and adopt an enterprise system is influenced by its network peers, both by direct and indirect network exposure. Our results suggest that network exposure and industry exposure differ based on the time and the category of firms looking to acquire a system. Network exposure seems to be more important at the earlier stage, and then resurfaces at the later stage of enterprise system life cycle.