Information technology, capabilities and Asset Ownership: Evidence from Taxicab Fleets
AbstractWe examine how information technology (IT) influences asset ownership through its impact on firms’ and agents’ capabilities. In particular, we propose that when IT is a substitute for agents’ industry-specific human capital, IT adoption leads to increased vertical integration. We test this prediction using micro data on vehicle ownership patterns from the Economic Census during a period when computerized dispatching systems were first adopted by taxicab firms. The empirical tests exploit exogenous variation in local market conditions, to identify the impact of dispatching technology on firm asset ownership. The results show that firms increase the proportion of taxicabs owned by 12% when they adopt new computerized dispatching systems. The findings suggest that firms increasingly vertically integrate when they acquire resources that substitute for their agents’ capabilities.
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Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 10-01.
Date of creation: 2010
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