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Complementarity and Contextuality in the Adoption of Information Systems in Korean Firms

  • Yunhee Kim
  • Jae Young Choi
  • Yeonbae Kim

    ()

    (Technology Management, Economics, and Policy Program (TEMEP), Seoul National University)

In order to examine the impact of adoption of Information Systems (ISs) on the actual performance of firms, we estimated the complementarities among ISs and found contextual factors using a survey dataset of 616 Korean firms. In particular, we introduced various contextual variables and analyzed their effects on the complementarities of firms. Our results indicate that IT stock serves as an important contextual factor for enhancing the complementarity between adoptions of Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM). It was also revealed that while IT stock has a strong positive direct impact on the performance of firms as well as an indirect impact mediated by ISs, other IT-related variables (such as IT organization and use of firewall) generally have a positive impact only when they are combined with the adoption of ISs.

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File URL: ftp://147.46.237.98/DP-19.pdf
File Function: First version, 2009
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Paper provided by Seoul National University; Technology Management, Economics, and Policy Program (TEMEP) in its series TEMEP Discussion Papers with number 200919.

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Length: 21 pages
Date of creation: Sep 2009
Date of revision: Oct 2009
Publication status: Published later version in the Journal of Applied Economics Letters of Taylor and Francis.
Handle: RePEc:snv:dp2009:200919
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  1. Feng-Cheng Fu & Chu-Ping Vijverberg & Yong-Sheng Chen, 2008. "Productivity and efficiency of state-owned enterprises in China," Journal of Productivity Analysis, Springer, vol. 29(3), pages 249-259, June.
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  3. Spyros Arvanitis, 2005. "Computerization, workplace organization, skilled labour and firm productivity: Evidence for the Swiss business sector," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(4), pages 225-249.
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  5. Ilsoon Shin, 2006. "Adoption of Enterprise Application Software and Firm Performance," Small Business Economics, Springer, vol. 26(3), pages 241-256, 04.
  6. Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
  7. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2.
  8. Bocquet, Rachel & Brossard, Olivier & Sabatier, Mareva, 2007. "Complementarities in organizational design and the diffusion of information technologies: An empirical analysis," Research Policy, Elsevier, vol. 36(3), pages 367-386, April.
  9. Anna Giunta & Francesco Trivieri, 2007. "Understanding the determinants of information technology adoption: evidence from Italian manufacturing firms," Applied Economics, Taylor & Francis Journals, vol. 39(10), pages 1325-1334.
  10. Milgrom, Paul & Roberts, John, 1995. "The Economics of Modern Manufacturing: Reply," American Economic Review, American Economic Association, vol. 85(4), pages 997-99, September.
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