Cash-Flow Model for Efficiency Evaluation in Multinational Trade Enterprises Applying E-Commerce

Abstract

In this study, the authors have investigated e-commerce in the activity of multinational trade enterprises (MNTEs) and highlighted the main differences between online and offline trade. Many studies are focusing on the application of e-commerce technologies but not on providing efficiency evaluation tool helping to identify how e-commerce technologies change trade business and propose its application in MNTEs. This research aims to provide the cash-flow model for an economic evaluation of investment and operations of e-commerce and traditional trade and the practical application of the model in MNTEs. To achieve this objective, the authors have proposed a cash-flow model useful for efficiency evaluation and its practical application. According to the case study analysis, trade enterprises which apply e-commerce technologies have approximately 3.7 times fewer employees and 3.1 times fewer investments in long-term tangible assets than other trade enterprises. However, MNTEs performing online business have 5.1 times fewer employees than MNTEs operating in offline. Of course, these numbers depend significantly on business size and the economies of scale. The study consists of three parts. In the first one, the paper discloses trade business changes determined by the investments into e-commerce. These results are presented on multinational and national business and disclose how actively multinational enterprises (the Mother Companies and their branches) and national ones invest in e-commerce. In the second part, the new cash-flow model is used for efficiency evaluation when trade firms practice e-commerce technologies. In the third part of this paper, the practical application of the model was delivered. Herein several trade MNTEs with and without e-commerce technologies are compared.

Evaluation on Performance of Domestic A-Share Listed Cross-Border E-Commerce Export Enterprises Based on Hierarchy Process and Grey Correlation

“…Irwan Hariandi considered that competitive advantage has a direct impact on enterprise performance [6]. Arunas Burinskas established a cash flow model that can be used for efficiency evaluation, compared the benefits of traditional trading enterprises and cross-border e-commerce enterprises, proposed that the implementation of e-commerce technology can reduce transaction costs in terms of enterprise employees and long-term tangible asset investment, and obtained that cross-border trading enterprises can better improve enterprise performance by using e-commerce technology and economies of scale [7]. Professor Hamed Taherdoost of the University of St. Petersburg, Russia, studied the applicability of the customer satisfaction model, tested the role of the e-service satisfaction model in the customer interaction of cross-border e-commerce enterprises through content validity, exploratory factor analysis, constructive test, and cluster discrimination, and also proved the training, performance, user friendliness, trust, availability, security quality, and design which have a direct and significant impact on cross-border e-commerce satisfaction [8].…”