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Determinants of Electronic Integration in the Insurance Industry: An Empirical Test


  • Akbar Zaheer

    (Carlson School of Management, University of Minnesota, 835 Management/Economics Building, 271 19th Ave South, Minneapolis, Minnesota 55455)

  • N. Venkatraman

    (Boston University School of Management, 704 Commonwealth Avenue, Boston, Massachusetts 02215)


Electronic integration---a form of vertical quasi-integration achieved through the deployment of dedicated computers and communication systems between relevant actors in the adjacent stages of the value-chain---is an important concept to researchers in the information systems field since it focuses on the role of information technology in restructuring vertical relationships. Drawing on theoretical and empirical research on transaction costs, we develop and test a model of the determinants of the degree of electronic integration in the commercial segment of the property and casualty (P&C) industry. Based on a sample of 120 independent agencies operating under dedicated information technology-mediated conditions, we provide empirical support for three hypotheses on the determinants of electronic integration. Implications and research extensions are identified to guide further research in this important area.

Suggested Citation

  • Akbar Zaheer & N. Venkatraman, 1994. "Determinants of Electronic Integration in the Insurance Industry: An Empirical Test," Management Science, INFORMS, vol. 40(5), pages 549-566, May.
  • Handle: RePEc:inm:ormnsc:v:40:y:1994:i:5:p:549-566

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    References listed on IDEAS

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    Cited by:

    1. Malhotra, Deepak & Lumineau, Fabrice, 2011. "Trust and collaboration in the aftermath of conflict: the effects of contract structure," MPRA Paper 38358, University Library of Munich, Germany.
    2. António Madureira & Nico Baken & Harry Bouwman, 2011. "Value of digital information networks: a holonic framework," Netnomics, Springer, vol. 12(1), pages 1-30, April.
    3. Kang, Min-Ping & Mahoney, Joseph T. & Tan, Danchi, 2007. "Why Firms Make Unilateral Investments Specific to Other Firms: The Case of OEM Suppliers," Working Papers 07-0110, University of Illinois at Urbana-Champaign, College of Business.
    4. Ali Tafti & Sunil Mithas & M. S. Krishnan, 2013. "The Effect of Information Technology-Enabled Flexibility on Formation and Market Value of Alliances," Management Science, INFORMS, vol. 59(1), pages 207-225, June.
    5. Maike Scherrer-Rathje & Patricia Deflorin & Gopesh Anand, 2010. "Outsourcing and its Impact on Manufacturing Flexibility: Contingencies Matter," Working Papers 0125, University of Zurich, Institute for Strategy and Business Economics (ISU).
    6. Nelson, Matthew L. & Shaw, Michael J., 2005. "Interorganizational System Standards Diffusion: The Role of Industry-Based Standards Development Organizations," Working Papers 05-0126, University of Illinois at Urbana-Champaign, College of Business.
    7. Gebauer, Judith & Mahoney, Joseph T., 2013. "Joining Supply and Demand Conditions of IT Enabled Change: Toward an Economic Theory of Inter-firm Modulation," Working Papers 13-0100, University of Illinois at Urbana-Champaign, College of Business.
    8. Rajiv D. Banker & Robert J. Kauffman, 2004. "50th Anniversary Article: The Evolution of Research on Information Systems: A Fiftieth-Year Survey of the Literature in Management Science," Management Science, INFORMS, vol. 50(3), pages 281-298, March.
    9. Matthias Meier & Martina Lütkewitte & Thomas Mellewigt & Carolin Decker, 2016. "How managers can build trust in strategic alliances: a meta-analysis on the central trust-building mechanisms," Journal of Business Economics, Springer, vol. 86(3), pages 229-257, April.
    10. de Moor, A. & Peterson, R.R., 2001. "Facilitating the evolution of electronic healthcare networks : Framing the changing socio-technical system," Other publications TiSEM 4b0f4265-1060-4944-aef3-0, Tilburg University, School of Economics and Management.
    11. Heritier Adrienne & Mueller-Debus Anna K & Thauer Christian R, 2010. "The Firm as an Inspector: Private Ordering and Political Rules," Business and Politics, De Gruyter, vol. 11(4), pages 1-34, January.
    12. Tridas Mukhopadhyay & Sunder Kekre, 2002. "Strategic and Operational Benefits of Electronic Integration in B2B Procurement Processes," Management Science, INFORMS, vol. 48(10), pages 1301-1313, October.
    13. Tang, Xinlin & Rai, Arun, 2014. "How should process capabilities be combined to leverage supplier relationships competitively?," European Journal of Operational Research, Elsevier, vol. 239(1), pages 119-129.
    14. Prosser, Alexander & Nickl, Alexander, 1997. "The impact of EDI on interorganizational integration," International Journal of Production Economics, Elsevier, vol. 52(3), pages 269-281, October.
    15. Haesevoets, Tessa & Reinders Folmer, Chris & De Cremer, David & Van Hiel, Alain, 2013. "Money isn’t all that matters: The use of financial compensation and apologies to preserve relationships in the aftermath of distributive harm," Journal of Economic Psychology, Elsevier, vol. 35(C), pages 95-107.


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