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A Comparative Research on the Impact of Environmental Uncertainty on Up and Downstream Virtual Integration

Virtual integration has become an alternative way to vertical integration. It is a new collaboration mechanism and enables enterprises and its partners to collaborate tightly on the basis of internetwork. Following the logical paradigm of Environment - Strategy - Performance, this study compares with the impact of Technological Uncertainty on the enterprises' up and downstream Virtual Integration and operational Performance. With the method of structural equation model, we found that technological uncertainty has a significant impact on up and downstream virtual integration at each aspect. Virtual integration with suppliers has a significant impact on timeliness improvement. The process integration with suppliers (customers) has an important contribution for firms to improve cost. Information sharing with customers has a negative contribution to improve cost.