Abstract: To get a better understanding of how e-business capability being used to improve supply chain performance, e-business capability is redefined by integrating the IT process-oriented view and the capability hierarchy view, and its two dimensions, i.e.the e-business system capability and e-business service capability, are identified.Then, a conceptual model linking e-business systems capability, IT support capability for collaborative strategy, and supply chain performance is developed, thus revealing the mechanism through which supply chain performance is influenced by e-business capability.The model differs from previous studies by (1) redefining e-business capability by integrating exiting literature and (2) proposing a mediating effect of e-business service capability on the relationship between e-business systems capability and supply chain performance.Further, a structural equation modeling analysis is used to analyze data from 152 manufacturing firms.Our findings indicate the existence of the two dimensions of e-business capability, and show that e-business service capability has a complete mediating effect on the relationship between e-business systems capability and supply chain performance.

Key words: e-business systems capability, supply chain performance, e-business service capability, mediating effect, structural equation modeling