Added value and pricing with information technology
MIS Quarterly
Essentials of Management Information Systems
Essentials of Management Information Systems
Information technology and economic performance: A critical review of the empirical evidence
ACM Computing Surveys (CSUR)
Information Technology and Productivity: Evidence from Country-Level Data
Management Science
The Value of Information Sharing in a Two-Level Supply Chain
Management Science
Information technology, incentives, and the optimal number of suppliers
Journal of Management Information Systems - Special section: Strategic and competitive information systems
Journal of Management Information Systems - Special section: Realizing value from information technology investment
Industry Level Supplier-Driven IT Spillovers
Management Science
An empirical investigation of net-enabled business value
MIS Quarterly
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We examine how one industry's productivity is affected by the IT capital of its customers and how this effect depends on industries' relative concentration. These customer-driven IT spillovers result from customers' IT investments in various information systems that reduce transaction costs through information sharing and coordination and lead to more efficient production and logistics upstream. The magnitude of IT spillovers depends on relative industry concentration because customers in more concentrated industries relative to those of their suppliers are better able to retain the benefits from their IT investments. We model customer-driven effects based on production theory and empirically test the model using two industry-level data sets covering different and overlapping time periods (1987--1999 and 1998--2005), different scopes of the economy (manufacturing only versus all industries), and different levels of industry aggregation. We find that, given an increase in a downstream industry's IT capital, there is a significant increase in downstream industry output as well as significant increases in upstream industry output. Moreover, the magnitude of IT spillovers is related to relative industry concentration: A 1% decrease in a customer's relative industry concentration increases spillovers by roughly 1%. Thus, further increases in IT capital can be justified along the supply chain, and an industry's relative concentration---which can reflect market power---in part determines the distribution of productivity benefits.