The Internet in industrial channels: its use in (and effects on) exchange relationships

The effects of the Internet on the long‐term viability of buyer/seller exchange relationships is examined within the US plastics industry. The author poses two possible scenarios: the Internet causes firms to be “drawn apart” due to the decrease of switching costs of changing suppliers; or firms become “closer” due to the communication efficiencies gained from the technology. A series of regression models lends support to the latter hypothesis. Along with this analysis, comparisons are made between Internet users and non‐users with regard to company size and position in the firm. Findings also show that Internet users tend to communicate with suppliers and customers more frequently using traditional modes than non‐users.