The effect of internetworking on business specialization transformation: Evidence from China

Network Information Technology has decreased both market transaction cost and the enterprise management cost, and it also changed the production pattern. But researchers have different views about the effect of the internetworking on the enterprise operation. Will the enterprise be diversified or specialized? Through the survey research of 224 China enterprises, it is found that there are two stages in the network application: on the initial stage of network application, the enterprise tends to extend the business scope, level down the specialization. On the second stage, enterprise tends to narrow the business scope, level up the specialization.