IDEAS home Printed from https://ideas.repec.org/p/cte/wbrepe/wb050101.html

The internet: strategy and boundaries of the firm

Author

Listed:
  • Fernández Rodríguez, Zulima Magdalena
  • Nieto Sánchez, María Jesús

Abstract

Many advantages have been ascribed to the Internet. Although it lacks the necessary elements to be regarded as a strategic resource, the Internet seems to be a useful tool to provide support for business strategies.In this work we discuss how the Internet can be used to support the development of capabilities and define firm boundaries. Using a sample of Spanish firms, empirically analysed, we find positive relationships between the use of the Internet and product differentiation, as well as the introduction of organizational changes. In addition, we present evidence that the Internet reduces both internal coordination costs and transaction costs as a result of the positive relationships found between the use of the Internet, the degree of vertical integration and the establishment of technological agreements with suppliers and customers.

Suggested Citation

  • Fernández Rodríguez, Zulima Magdalena & Nieto Sánchez, María Jesús, 2005. "The internet: strategy and boundaries of the firm," DEE - Working Papers. Business Economics. WB wb050101, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    • Handle: RePEc:cte:wbrepe:wb050101
    as

    Download full text from publisher

    File URL: https://e-archivo.uc3m.es/rest/api/core/bitstreams/6567604a-9601-4728-9611-2ed2e0fb7c25/content
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:bla:jindec:v:50:y:2002:i:3:p:351-67 is not listed on IDEAS
    2. Karen Clay & Ramayya Krishnan & Eric Wolff & Danny Fernandes, 2002. "Retail Strategies on the Web: Price and Non–price Competition in the Online Book Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 50(3), pages 351-367, September.
    3. Erik Brynjolfsson & Lorin Hitt, 1996. "Paradox Lost? Firm-Level Evidence on the Returns to Information Systems Spending," Management Science, INFORMS, vol. 42(4), pages 541-558, April.
    4. Klaus Brockhoff, 1992. "R&D Cooperation Between Firms---A Perceived Transaction Cost Perspective," Management Science, INFORMS, vol. 38(4), pages 514-524, April.
    5. Erik Brynjolfsson & Michael D. Smith, 2000. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Management Science, INFORMS, vol. 46(4), pages 563-585, April.
    6. Erik Brynjolfsson & Thomas W. Malone & Vijay Gurbaxani & Ajit Kambil, 1994. "Does Information Technology Lead to Smaller Firms?," Management Science, INFORMS, vol. 40(12), pages 1628-1644, December.
    7. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    8. Booth, Marilyn E. & Philip, George, 1998. "Technology, competencies, and competitiveness: The case for reconfigurable and flexible strategies," Journal of Business Research, Elsevier, vol. 41(1), pages 29-40, January.
    9. Sanjeev Dewan & Chung-ki Min, 1997. "The Substitution of Information Technology for Other Factors of Production: A Firm Level Analysis," Management Science, INFORMS, vol. 43(12), pages 1660-1675, December.
    10. Michael A. Cusumano & Akira Takeishi, 1991. "Supplier relations and management: A survey of Japanese, Japanese‐transplant, and U.S. auto plants," Strategic Management Journal, Wiley Blackwell, vol. 12(8), pages 563-588, November.
    11. Sanjeev Dewan & Steven C. Michael & Chung-ki Min, 1998. "Firm Characteristics and Investments in Information Technology: Scale and Scope Effects," Information Systems Research, INFORMS, vol. 9(3), pages 219-232, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sanjeev Dewan & Fei Ren, 2011. "Information Technology and Firm Boundaries: Impact on Firm Risk and Return Performance," Information Systems Research, INFORMS, vol. 22(2), pages 369-388, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sinan Aral & Peter Weill, 2007. "IT Assets, Organizational Capabilities, and Firm Performance: How Resource Allocations and Organizational Differences Explain Performance Variation," Organization Science, INFORMS, vol. 18(5), pages 763-780, October.
    2. Rajiv D. Banker & Joakim Kalvenes & Raymond A. Patterson, 2006. "Research Note---Information Technology, Contract Completeness, and Buyer-Supplier Relationships," Information Systems Research, INFORMS, vol. 17(2), pages 180-193, June.
    3. Sanjeev Dewan & Fei Ren, 2011. "Information Technology and Firm Boundaries: Impact on Firm Risk and Return Performance," Information Systems Research, INFORMS, vol. 22(2), pages 369-388, June.
    4. Chen, Yueh H. & Lin, Winston T., 2009. "Analyzing the relationships between information technology, inputs substitution and national characteristics based on CES stochastic frontier production models," International Journal of Production Economics, Elsevier, vol. 120(2), pages 552-569, August.
    5. 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.
    6. Lin, Winston T. & Chiang, Chung-Yean, 2011. "The impacts of country characteristics upon the value of information technology as measured by productive efficiency," International Journal of Production Economics, Elsevier, vol. 132(1), pages 13-33, July.
    7. Prasanna Tambe & Lorin M. Hitt, 2014. "Measuring Information Technology Spillovers," Information Systems Research, INFORMS, vol. 25(1), pages 53-71, March.
    8. Rajiv Kohli & Sarv Devaraj, 2003. "Measuring Information Technology Payoff: A Meta-Analysis of Structural Variables in Firm-Level Empirical Research," Information Systems Research, INFORMS, vol. 14(2), pages 127-145, June.
    9. Zand, Fardad & Van Beers, Cees & Van Leeuwen, George, 2011. "Information technology, organizational change and firm productivity: A panel study of complementarity effects and clustering patterns in Manufacturing and Services," MPRA Paper 46469, University Library of Munich, Germany.
    10. Neeraj Mittal & Barrie R. Nault, 2009. "Research Note ---Investments in Information Technology: Indirect Effects and Information Technology Intensity," Information Systems Research, INFORMS, vol. 20(1), pages 140-154, March.
    11. Stefan Schweikl & Robert Obermaier, 2020. "Lessons from three decades of IT productivity research: towards a better understanding of IT-induced productivity effects," Management Review Quarterly, Springer, vol. 70(4), pages 461-507, November.
    12. Kobelsky, Kevin W. & Robinson, Michael A., 2010. "The impact of outsourcing on information technology spending," International Journal of Accounting Information Systems, Elsevier, vol. 11(2), pages 105-119.
    13. Prasanna Tambe, 2014. "Big Data Investment, Skills, and Firm Value," Management Science, INFORMS, vol. 60(6), pages 1452-1469, June.
    14. Erik Brynjolfsson & Andrew McAfee & Michael Sorell & Feng Zhu, 2007. "Scale without mass: business process replication and industry dynamics," Proceedings, Federal Reserve Bank of San Francisco, issue nov.
    15. Kobelsky, Kevin & Hunter, Starling & Richardson, Vernon J., 2008. "Information technology, contextual factors and the volatility of firm performance," International Journal of Accounting Information Systems, Elsevier, vol. 9(3), pages 154-174.
    16. Yao, Lee J. & Liu, Chunhui & Chan, Siew H., 2010. "The influence of firm specific context on realizing information technology business value in manufacturing industry," International Journal of Accounting Information Systems, Elsevier, vol. 11(4), pages 353-362.
    17. Wilbur Chen & Suraj Srinivasan, 2024. "Going digital: implications for firm value and performance," Review of Accounting Studies, Springer, vol. 29(2), pages 1619-1665, June.
    18. Konings, Jozef & Dhyne, Emmanuel & Van den bosch, Jeroen & ,, 2018. "The Return on Information Technology: Who Benefits Most?," CEPR Discussion Papers 13246, C.E.P.R. Discussion Papers.
    19. Scott, Susan V. & Van Reenen, John & Zachariadis, Markos, 2017. "The long-term effect of digital innovation on bank performance: An empirical study of SWIFT adoption in financial services," Research Policy, Elsevier, vol. 46(5), pages 984-1004.
    20. Saggi Nevo & Michael Wade & Wade D. Cook, 2010. "An empirical study of IT as a factor of production: The case of Net-enabled IT assets," Information Systems Frontiers, Springer, vol. 12(3), pages 323-335, July.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cte:wbrepe:wb050101. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ana Poveda (email available below). General contact details of provider: http://www.business.uc3m.es/es/index .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.