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IT for Information-Based Partnerships: Empirical Analysis of Environmental Contingencies to Value Co-Creation

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  • Terence Saldanha
  • Nigel Melville
  • Ronald Ramirez
  • Vernon Richardson
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    Abstract

    We empirically examine IT value co-creation in supply chains, incorporating key contingencies of the competitive environment. Prior research suggests that IT used for strategic informationbased partnerships may benefit supply chains facing higher volatility, enabling tightly coupled integration and enhanced strategic response to changing consumer preferences. Analyzing a unique dataset comprising over 6,000 U.S. manufacturing plants, we obtain three principal results. First, value co-creation using either IT for strategic information-based partnerships (ITIP) or merely IT for transaction efficiency (ITT) is positive and significant. Second, the co-created value from ITIP is larger than that for (ITT), suggesting that information-based partnerships, while perhaps requiring a greater investment, yield a higher return. Third and most importantly, co-created value from using IT for information-based partnerships is positively moderated by demand volatility, i.e., value is greater in higher demand volatility environments. However, we find the opposite is true for using IT for efficient transactions. This is a new contribution to the literature and has important theoretical and practical implications.

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    File URL: ftp://ftp2.census.gov/ces/wp/2009/CES-WP-09-42.pdf
    File Function: First version, 2009
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    Bibliographic Info

    Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 09-42.

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    Length: 42 pages
    Date of creation: Dec 2009
    Date of revision:
    Handle: RePEc:cen:wpaper:09-42

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    Related research

    Keywords: Supply Chain Management; Supply chain Partnership; Information Sharing; Environmental Turbulence; Dynamic Capabilities; Agility;

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