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http://hdl.handle.net/2451/28476
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| Title: | How Do Mobile Information Technology Networks Affect Firm Strategy and
Performance? Firm-Level Evidence from Taxicab Fleets |
| Authors: | Rawley, Evan - University of California, Berkeley |
| Issue Date: | 2006 |
| Series/Report no.: | NET Institute Working Paper;06-28 |
| Abstract: | This paper examines how the adoption of mobile information technology
networks impact firm strategy and performance in the U.S. taxicab
industry. Using a rich, novel firm-level data set from the Economic
Census, I test transaction cost economics' prediction that adoption of
mobile IT networks leads to shifts in the boundary of the firm toward
increased fleet ownership of vehicles. I then exploit the homogeneity of
the industry's production function and exogenous variation in local
market conditions to precisely measure the impact of adoption of mobile
IT networks on productivity. I find strong evidence that firms respond
to adoption of mobile IT networks by changing their organizational
structure, shifting toward owning a greater fraction of vehicles in
their fleets (as opposed to contracting with independent driver-owners
for vehicles). I then use a precise and economically meaningful measure
of firm performance to show that adoption of mobile IT networks causes
firms to become more productive. The results suggest that adoption of
mobile IT networks increases asset utilization by improving within-firm
coordination but that firms must simultaneously shift toward a more
highly vertically integrated structure to fully capture the benefits of
mobile IT networks. |
| URI: | http://hdl.handle.net/2451/28476 |
| Appears in Collections: | NET Institute Working Papers Series
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