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Mediation of Perceived Innovation Characteristics on ERP Adoption in Industrial Cluster

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  • N. Elangovan

    (Department of Management, Christ University, Benguluru, India)

Abstract

An industrial cluster, due to its close network of institutions, will experience various pressures that force the industry to have a homogeneous structure, norms, and practices. These pressures can also lead to adoption of innovative technologies. Enterprise Resource Planning (ERP) is perceived as a sophisticated technology and diffuses across the cluster by its innovative characteristics. However, firms in the industrial cluster will have different rate of adoption of technologies due to the varying level of knowledge spillover and a heterogeneous absorptive capacity. This study empirically tests how absorptive capacity mediates the institutional forces and the perceived innovation characteristics towards the ERP adoption in an industrial cluster. Mediation effect and the model validity are tested using SEM technique. The results show that absorptive capacity complements the forces of institutional pressure and the perceived innovation characteristics on ERP adoption. The implications of managing the absorptive capacity for better ERP adoption are discussed.

Suggested Citation

  • N. Elangovan, 2016. "Mediation of Perceived Innovation Characteristics on ERP Adoption in Industrial Cluster," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 13(03), pages 1-19, June.
    • Handle: RePEc:wsi:ijitmx:v:13:y:2016:i:03:n:s0219877016400034
    DOI: 10.1142/S0219877016400034
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    References listed on IDEAS

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    4. Liane Elbertsen & Rik Van Reekum, 2008. "To ERP or not to ERP? Factors influencing the adoption decision," International Journal of Management and Enterprise Development, Inderscience Enterprises Ltd, vol. 5(3), pages 310-330.
    5. Chari, Sharad, 2000. "The Agrarian Origins of the Knitwear Industrial Cluster in Tiruppur, India," World Development, Elsevier, vol. 28(3), pages 579-599, March.
    6. van den Bosch, F.A.J. & van Wijk, R.A.J.L. & Volberda, H.W., 2003. "Absorptive Capacity: Antecedents, Models and Outcomes," ERIM Report Series Research in Management ERS-2003-035-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    7. R. Rajendran & N. Elangovan, 2012. "Response of Small Enterprises to the Pressures of ERP Adoption," International Journal of Enterprise Information Systems (IJEIS), IGI Global, vol. 8(1), pages 28-50, January.
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    Cited by:

    1. Deepak Chandrashekar & M. H. Bala Subrahmanya & Kshitija Joshi & Tathagat Priyadarshi, 2019. "Effect of Innovation on Firm Performance — The Case of a Technology Intensive Manufacturing Cluster in India," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(07), pages 1-31, November.

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