Impact of Information Technology Capital on Firm Scope and Performance: The Role of Asset Characteristics
Published at: Academy of Management Journal 56(4), 2013, pp. 1125-1147
51 Pages Posted: 11 Nov 2013
Date Written: November 10, 2013
This research draws on transaction-cost and resource-based theory to examine how information technology (IT) capital moderates the relationship between different types of assets and firm scope — both vertical integration and diversification. The analysis suggests that IT capital enables firms with narrowly valuable assets to be less vertically integrated and less diversified, and enables firms with broadly valuable assets to be more vertically integrated and more diversified. The moderating influence of IT capital on the relationship between different types of assets and firms’ vertical and product market scope is consistent with transactions-cost as well as resource-based traditions.
Keywords: Resource-Based View, Transaction Cost Economics, Information Technology (IT) Capital, Vertical Integration, Diversification, Usage specificity, Resource flexibility, Electronic Brokerage Effect, Electronic Integration Effect
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