Previous research has found that information technology (IT) investment is associated with significant productivity gains for developed countries but not for developing countries. Yet developing countries have continued to increase their investment in IT rapidly. Given this apparent disconnect, there is a need for new research to study whether the investment has begun to pay off in greater productivity for developing countries. We analyze new data on IT investment and productivity for 45 countries from 1994 to 2007, and compare the results with earlier research. We find that upper-income developing countries have achieved positive and significant productivity gains from IT investment in the more recent period as they have increased their IT capital stocks and gained experience with the use of IT. We also find that the productivity effects of IT are moderated by country factors, including human resources, openness to foreign investment, and the quality and cost of the telecommunications infrastructure. The academic implication is that the effect of IT on productivity is expanding from the richest countries into a large group of developing countries. The policy implication is that lower-tier developing countries can also expect productivity gains from IT investments, particularly through policies that support IT use, such as greater openness to foreign investment, increased investment in tertiary education, and reduced telecommunications costs.
This research investigates the relationship between a manufacturer's use of information technology (IT) (particularly electronic procurement) and the number of suppliers in its supply chain. Will a manufacturer use more or fewer suppliers due to the increasing use of IT? Based on data from a sample of 150 U.S. manufacturers, we find no direct relationship between e-procurement and number of suppliers at the aggregate level. However, when we distinguish the type of goods purchased, we find that the use of electronic procurement is associated with buying from more suppliers for custom goods but from fewer suppliers for standard (or commodity) goods. It is possible that for commodity goods, an efficiently functioning transparent market ensures that a few suppliers are sufficient, whereas for custom goods the need for protection from opportunistic vendor holdup leads to the use of more suppliers. Further, the positive relationship between number of suppliers and electronic procurement for custom goods is negatively moderated by deeper buyer--supplier system integration. This implies that such integration can help buyers obtain better "fit" for their customized requirements, an alternative to increasing fit by employing more suppliers as proposed in the extant literature.
Grounded in the technology–organization–environment (TOE) framework, we develop a research model for assessing the value of e-business at the firm level. Based on this framework, we formulate six hypotheses and identify six factors (technology readiness, firm size, global scope, financial resources, competition intensity, and regulatory environment) that may affect value creation of e-business. Survey data from 612 firms across 10 countries in the financial services industry were collected and used to test the theoretical model. To examine how e-business value is influenced by economic environments, we compare two subsamples from developed and developing countries. Based on structural equation modeling, our empirical analysis demonstrates several key findings: (1) Within the TOE framework, technology readiness emerges as the strongest factor for e-business value, while financial resources, global scope, and regulatory environment also significantly contribute to e-business value. (2) Firm size is negatively related to e-business value, suggesting that structural inertia associated with large firms tends to retard e-business value. (3) Competitive pressure often drives firms to adopt e-business, but e-business value is associated more with internal organizational resources (e.g., technological readiness) than with external pressure to adopt. (4) While financial resources are an important factor in developing countries, technological capabilities become far more important in developed countries. This suggests that as firms move into deeper stages of e-business transformation, the key determinant of e-business value shifts from monetary spending to higher dimensions of organizational capabilities. (5) Government regulation plays a much more important role in developing countries than in developed countries. These findings indicate the usefulness of the proposed research model and theoretical framework for studying e-business value. They also provide insight
For more than a decade NEC dominated the Japanese PC market with its PC-98 architecture, which was incompatible both with its major Japanese rivals and the global PC standard. However, NEC was powerless to prevent the introduction of Japanese versions of Windows 3.1 and 95 that ran on its competitors' architectures as well as on the PC-98, unifying the Japanese PC market and creating a common set of application programming interfaces for all Intel-based Japanese PCs. The introduction of Windows rendered obsolete the large DOS-based software library that had provided strong positive externalities for the NEC architecture. Absent those advantages, the market share of the PC-98 standard fell from 60% to 33% in five years, and NEC finally abandoned the PC-98 in favor of the global standard. An examination of the unusual rise and fall of the PC-98 shows how victory in a standards competition can be negated by the introduction of a new architectural layer that spans two or more previously incompatible architectures.
Over the last twenty years, the computer industry has become global with respect to computer production as well as computer use, a trend which has raised concerns among U.S. policymakers of hollowing out the industry and exporting employment. This paper uses the framework of increasing returns to analyze the issue. It classifies market segments within the computer industry, shows how the advent of the personal computer created these segments, examines how this change in the structure of the industry led to the evolution of an Asia-Pacific production network, identifies company and country leadership in this network, and evaluates the implications for the United States. It shows that some manufacturing employment, mainly in the decreasing returns segments of the industry, has shifted to the Asia- Pacific region. However, it also shows that employment in some manufacturing segments and in software and services, which are increasing returns or hybrid markets, has increased dramatically in the United States. It concludes that the global division of labor between the United States and both companies and countries in the Asia-Pacific region has been largely positive in that it has supported the continuing U.S. leadership position in the global computer industry.