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Studies of e-business adoption have generally been restricted to understanding organizational factors. Institutional factors provide an alternate explanation of the diffusion of e-business across organizations. We test the influence of coercive, normative, and mimetic pressures on first-time adoption of B2B and B2C innovations by organizations. We further propose that an organization’s response to institutional pressures may be affected by its distinctive organizational identity. Specifically, we hypothesize that those organizations that value innovation and customer service will be more likely to adopt e-business over time. We test the likelihood that the intensity of institutional pressures will vary over different time periods. Data are gathered from secondary sources and we use event-history techniques to test our model. We contribute to the IS literature by integrating institutional and organizational identity concepts to understand the adoption and diffusion of Type III innovations.