The impact of information systems on organizations and markets
Communications of the ACM
Journal of Management Information Systems
Does information technology lead to smaller firms?
Management Science
Electronic markets and electronic hierarchies
Communications of the ACM
Information distortion in a supply chain: the bullwhip effect
Management Science - Special issue on frontier research in manufacturing and logistics
Information Technology Effects on Firm Performance As Measured by Tobin's Q
Management Science
Firm Characteristics and Investments in Information Technology: Scale Andscope Effects
Information Systems Research
Information Technology and Firm Boundaries: Evidence From Panel Data
Information Systems Research
Research Report. Can Edi Benefit Adopters?
Information Systems Research
Performance benefits through integration hubs
Communications of the ACM - Transforming China
Analyzing cost-effectiveness of organizations: the impact of information technology spending
Journal of Management Information Systems - Special section: Strategic and competitive information systems
Journal of Management Information Systems - Special section: Strategic and competitive information systems
Organizational Boundaries and Theories of Organization
Organization Science
Coordinating for Flexibility in e-Business Supply Chains
Journal of Management Information Systems
Investment in Enterprise Resource Planning: Business Impact and Productivity Measures
Journal of Management Information Systems
Physical product reengineering with embedded information technology
Communications of the ACM
An empirical investigation of net-enabled business value
MIS Quarterly
Impacts of internal and interorganizational information systems on the outsourcing of manufacturing
The Journal of Strategic Information Systems
Event history, spatial analysis and count data methods for empirical research in information systems
Information Technology and Management
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The information systems (IS) literature suggests that by lowering coordination costs, information technology (IT) will lead to an overall shift towards more use of markets. Empirical work in this area provides evidence that IT is associated with a decrease in vertical integration (VI). Economy-wide data, however, suggests that over the last 25 years the average level of VI has, in fact, increased. This paper studies this empirical anomaly by explicating the moderating impact of two measures of competitive environment, demand uncertainty, and industry concentration, on the relationship between IT and VI. We examine firms included in 1995 to 1997 InformationWeek 500 and the COMPUSTAT database. Consistent with the IS literature, the analysis suggests that IT is associated with a decrease in VI when demand uncertainty is high or industry concentration is low. However, contrary to the IS literature, IT is found to be associated with an increase in VI when industry concentration is high or demand uncertainty is low. Furthermore, as demand uncertainty increases, less vertically integrated firms invest more in IT, while as industry concentration increases, more vertically integrated firms invest more in IT. The analysis also suggests that firms' choice of the level of VI and IT investment, under different levels of demand uncertainty and industry concentration, are rational. When demand uncertainty is high or industry concentration is low, increase in VI may increase coordination and production costs. Thus, less VI is rational. However, when industry concentration is high or demand uncertainty is low, increase in VI may decrease coordination and production costs. Thus, firms choose more VI in such industries. The implications for research and practice are discussed.