Vertical Integration, Transactions Costs, and Technology Adoption - in the Insurance Industry

48 Pages Posted: 2 Jun 2006

See all articles by Chris Forman

Chris Forman

Cornell University - Dyson School of Applied Economics and Management

Anne Gron

NERA Economic Consulting

Date Written: June 2006

Abstract

Advances in frontier technology are only the first in a series of steps that lead to economic growth. The next step involves use of that technology by economic agents. In this paper, we examine whether frictions created by differences in firm boundaries affect the speed with which firms adopt new technology. We show that vertical integration in distribution has a significant impact on the speed with which insurers adopt Internet applications that require coordination with agents. In contrast, vertical integration does not effect adoption of basic access technologies that can be adopted without agent cooperation.

Keywords: vertical relationships, adoption studies, Internet

JEL Classification: L22, O33, L86

Suggested Citation

Forman, Chris and Gron, Anne, Vertical Integration, Transactions Costs, and Technology Adoption - in the Insurance Industry (June 2006). Available at SSRN: https://ssrn.com/abstract=905934 or http://dx.doi.org/10.2139/ssrn.905934

Chris Forman (Contact Author)

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

Anne Gron

NERA Economic Consulting ( email )

One Main Street, 5th Floor
Cambridge, MA 02142
United States

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