ABSTRACTBringing innovations to market is critical to industrial progress and economic growth. We explore the potential for information technology (IT) to enable innovations, and thus improve productivity. We hypothesize that a knowledge stock of process‐oriented research and development (R&D) increases total factor productivity growth by leveraging traditional forms of capital and labor, and further enhances the ability of IT capital to increase productivity. We estimate these relationships using two broad panels of U.S. industries covering the periods 1987–1998 and 1998–2005. The results indicate qualified support for a synergistic effect of R&D and IT investment in both periods.
We propose a general and precise model of a network alliance that addresses both the role of membership and the role of incentives in the coordination of actions and interactions of network alliance members. Using examples in such disparate industries as professional engineering, accounting services, and commercial fueling as the basis of our model, we show that a commission fee chosen by the network provider can be combined with a classical exclusivity agreement-which does not restrict where members recruit customers, while at the same time protecting the members' locations where customers are served-to motivate increases in member investment and, consequently, in network profits. We also show that the most profitable network size emerges naturally. That is, the most profitable network size restricts membership, and emerges as a consequence of the exclusivity agreement and the setting of the commission fee. Our results require that members' investments are more valuable with increases in other members' investments, that prospective members are sufficiently different that there is an adequate range in the business potential of members, and that the effect of other members' investments on a given member's business potential is moderately low.
When using electronic marketplaces as a method to exchange goods and services in business-to-business markets, investments are required to integrate this method of buying and selling into the internal systems of the market participants. These investments are typically information technology (IT) investments by buyers and sellers, and additionalinvestment by owners of the electronic market (EM). In our model we include specifications of the relationships within IT investments by buyers and sellers, the relationships between IT investments and EM investment, as well as the impact of increasing standardization of the market. We find that buyer and seller IT investments and EM investment can be coordinated so that a pure strategy Nash equilibrium obtains over a certain range of EM investment, and demonstrate that this continues to be true whether buyers and sellers are independent of the EM, or if subsets of buyers or sellers own the EM. In the latter case buyers or sellers that own the EM have higher IT investments. We also find that increasing standardization of the market increases equilibrium levels of EM investment.
In many industries, agent-intermediated markets are inefficient because information about latent demand and supply never gets to market. We demonstrate how information technology (IT) in the form of an agent-intermediated electronic market (EM) alleviates this problem by enhancing the agent-as-market-maker using the international freight transportation industry as an example. We find that an EM increases agent participation and investment thereby increasing demand and supply. Because of tradeoffs between incentives for investment, the EM chooses a profit allocation between agents resulting in limited agent participation. In addition, when price depends on demand and supply balances, price and volume in the market can increase simultaneously.
This paper demonstrates that globalization, taking the form of a higher import component of consumption and a larger export component of GDP, is the cause of the apparent breakdown in the relationship between excess demand and inflation. Within a parsimonious empirical framework, we show that increasing openness of the US economy is all that is needed to re-establish the relationship between inflation and capacity utilization. We also show that international trade has a significant separate influence on inflation, and is important for identifying a Phillips curve relationship between unemployment and inflation.
In a Forbes cover story, an investment banker expressed a preference for hiring former athletes, not because they are competitive, but "because they recycle so quickly after things go wrong" [12]. Their ability to quickly get past a failure, analyze what went wrong, and correctly adapt future performance is what sets them apart from other employees. While the ability to overcome adversity is a recognized skill of effective business professionals, its role has been neglected in the realm of IT project failures. This is unfortunate because failure is common: about 15% of all IT projects are canceled before completion [10], some with disastrous effects [1].
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This paper finds that approximately one-third of the items in the CPI are governed by price regulations that can slow and add noise to the response of prices to changes in cost or demand conditions. Consequently, regulation is a possible partial explanation of sticky prices in the overall rate of inflation, and delayed response to changes in the money supply. A survey is used to decompose the CPI into freely determined and regulated sub-components. Evidence is provided that prices in the regulated sector of the economy respond approximately two quarters after prices in the freely determined sector, thereby contributing a source of stickiness in overall inflation and in the response of inflation to monetary policy.
This paper is the first test of a parsimonious model that posits three factors as determinants of the adoption of electronic data interchange (EDI):readiness, perceived benefits, andexternal pressure. To construct the model, we identified and organized the factors that were found to be influential in prior EDI research. By testing all these factors together in one model, we are able to investigate their relative contributions to EDI adoption decisions. Senior purchasing managers, chosen for their experience with EDI and proximity to the EDI adoption decision, were surveyed and their responses analyzed using structural equation modeling. All three determinants were found to be significant predictors of intent to adopt EDI, with external pressure and readiness being considerably more important than perceived benefits. We show that the constructs in this model can be categorized into three levels:technological, organizational, andinterorganizational. We hypothesize that these categories of influence will also be determinants of the adoption of other emerging forms of interorganizational systems (IOS). 1
In one particular action research (AR) methodology, information systems prototyping (ISP), the goals are to involve the researcher in a facilitative and collaborative role with stakeholders in the development of an information system that satisfies their collective needs. But what happens when political and structural conflict and coercive action erupts? This article features an AR case, where the development of an electronic patient record in a heart clinic, resulted in a period of intense structural conflict, and the dismissal of an organizational member. Further analysis suggests that four factors can explain these unusual outcomes and their relationship with the use of an ISP method. These include: the specification of measures and perceptions of success within the AR method (goals); general problems with the AR methodology and/or its clear delineation (processes); problems in using a particular AR methodology in a specific time and place (contingency); and problems with the researcher’s implementation of the AR processes (implementation). The study also highlights a number of areas for development of ISP.
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The authors develop strategies that suppliers can use to foster the adoption of interorganizational information systems innovations, The strategies focus on adoption support to overcome innovation adoption barriers, accounting for the effect of the innovation on ongoing supplier-customer transactions. Modeling a dimension of the customer (organizational innovativeness) and a dimension of the innovation (radicalness) they derive optimal supplier strategies for when the supplier can differentiate individual customer innovativeness and when it cannot. In the former case, knowledge of individual customer innovativeness results in a triage model-some customers adopt without support, some require support to adopt, and some do not adopt and should not be supported. A lack of knowledge of customer innovativeness results in an undifferentiated strategy directed at all customers. Knowledge of customer innovativeness increases overall adoption and supplier profits and lowers adoption support to those customers that receive support in both cases.
Electronic data interchange (EDI) is one form of electronic commerce (EC) that promises adopting firms benefits that include cost savings through increased efficiency, improved transaction accuracy, improved managerial control, reduced inventory levels, faster cycle times, and the possibility for strategic repositioning of the firm (Bergeron and Raymond 1992). However, EDI has not achieved the predicted penetration levels, for reasons that are not yet fully understood (Bouchard 1993).
The authors have found that information technology allows the creation of virtual enterprises-thereby enabling new forms of organization. The paper addresses the problem where expertise about customers and physical assets are separate. Traditional organizations couple these two aspects, often overlooking the contribution externalities make to incentives. They describe how IT-enabled affiliations can employ the externalities to improve incentives and become more profitable
Many EDI researchers and practitioners have recognized the importance of high penetration levels for the success of EDI. Unfortunately, such penetration is partly impeded by the resistance of small companies to become EDI capable. To investigate this issue, we identify three major factors that influence the EDI adoption practices of small firms. These factors are: organizational readiness (because of the low levels of IT sophistication and resource availability of small firms), external pressures to adopt (because of the weak market positions of small firms and the network nature of the technology), and perceived benefits (because of the limited impact that IT has on small firms due to under-utilization and lack of integration). By combining the anticipated effects of these factors, we developed a framework of EDI adoption by small businesses. The applicability of this framework is empirically demonstrated using the results of seven case studies. Lastly, recommendations are made for the development of successful EDI partner expansion plans. These include the development of a long term EDI partner expansion plan from the very beginning, the individual assessment of each partner's EDI preparedness level, and the selection of appropriate influence tactics to expedite adoption by small partners. Specifically, it is suggested that EDI initiators pursue promotional efforts to improve partners' perceptions of EDI benefits, provide financial and technological assistance to partners with low organizational readiness, and carefully select and enact influence strategies to reduce resistance.
This study evaluates the extent to which the added value to customers from a supplier's application of information technology (IT) is manifested through premium prices of a traded good. We demonstrate that IT can add value to an otherwise undifferentiated good and study how these benefits accrue to customers from the adoption of IT. Analyzing a case in which the traded good is a homogeneous commodity, commercial fueling, our data shows that the critical impacts of IT are convenience and control -- that is, convenience that provides improved access to fuel and control that reduces problems of delegating purchasing authority for the customer. The value of this additional service is exhibited in premium prices customers are willing to pay for the IT-enhanced traded good, relative to the same good without IT. Compared to the price without IT, statistical analysis of the supplier's pricing history demonstrates the application of IT to commercial fuel yielded price premiums of between five and 12 percent of the retail fuel price.