E-Business Adoption by Small Tourism Firms and Shadow Economic Practices

Introduction

Few innovations have such an immense potential as the e-business for increasing firms’ efficiency and sales (Blake, Sinclair, & Campos Soria, 2006), improvement of internal processes, cost saving, and greater customer satisfaction (Falk, 2005). In spite of these advantages, the use of e-business in small firms is still insufficient (Eikebrokk & Olsen, 2007). Most often this was explained by small size related shortages such as weaker resources (Riemenschneider, Harrison & Mykytyn, 2003).

During the past ten years the tourism sector experienced a huge rise in online bookings, which was supported by the development of sophisticated IT networks (WTTC, 2011, pp. 22). In this online market many small tourism firms (STF) have been threatened by disintermediation. To prevent it the STF have to become more customer-oriented (Bennett & Lai, 2005). There is sufficient market share for small tour operators and travel agencies who can deliver personalised and competitive packages (Buhalis & Jun, 2011, p. 19).

The e-business adoption is a distinct topic, under which many research questions can be investigated such as “adoption factors, adoption barriers, adoption theories, and adoption differences across units, regions, and cultures” (Chen & Holsapple, 2013, p. 262). Most of the researches on e-business adoption explored the factors (barriers and drivers) that influence SMEs owner decisions. As Gibbs, Kraemer & Dedrick (2007) stated, however, there is a need to develop further an integral theoretical framework for explaining the IT adoption by small firms. Thomas, Shaw & Page (2011) also underlined the necessity of more empirical researches on the e-business adoption by small tourism firms in different contexts.

Among the factors influencing the e-business adoption less attention was given to specific institutional conditions in which the firms operate. An important institutional dimension in the emergent and transition economies is the variety of shadow economic practices. Many small tourism firms in these economies succeed to survive out of the online tourism market. In some cases it is due to specific products, like a religious tourism in Egypt (Abou-Shouk, Megicks & Lim, 2012, p. 206), or other cultural features (Gong, 2009, p. 92). In other cases the non-adoption of e-business might reflects a specific institutional feature: the opportunity of the small firm manager to keep a business non transparent in order to avoid taxes or social security. To our knowledge, however, there were no researches on the connections between the e-business adoption by small tourism firms and the spread up of the shadow economic practices in the sector.

While in less developed countries the informal sector reflects the unregistered small businesses, in the developed countries the informality refers to practices such as undeclared work, undeclared deals, and sales under-reporting by legally registered firms. The shadow economy includes all market-based legal production of goods and services that are deliberately concealed from public authorities in order to avoid: 1) payment of income, value added or other taxes; 2) payment of social security contributions; 3) having to meet certain legal labor market standards, such as minimum wages, maximum working hours, safety standards, etc.; and 4) complying with certain administrative obligations, such as completing statistical questionnaires or other administrative forms (Schneider, 2012, p. 6).