Stern School of Business >
IOMS: Information Systems Working Papers >
Please use this identifier to cite or link to this item:
|Title: ||APPROPRIABILITY AND THE INDIRECT VALUE OF CRS OWNERSHIP IN THE AIRLINE INDUSTRY|
|Authors: ||Duliba, Katherine A.|
Kauffman, Robert J.
Lucas, Henry C. , Jr.
business value of IT
computerized reservation systems
market share models
|Issue Date: ||Nov-1996|
|Publisher: ||Stern School of Business, New York University|
|Series/Report no.: ||IS-96-19|
|Abstract: ||It is difficult for the firm investing in information technology (IT) to appropriate a1
of the benefits from its investment for itself- it is very easy to imitate innovations in IT.
Airlines have installed computerized reservations systems (CRSs) in travel agencies in
order to appropriate the returns from their investments in information technology. The
airlines expected to obtain a number of benefits from this strategy including increased
efficiency, possible bias in favor of the CRS owner on the part of the travel agent, and
fees from other airlines for making reservations for them. The purpose of this paper is
to evaluate the impact of the indirect (non-fee) benefits to CRS owners from deploying
systems in travel agencies. These indirect benefits should be seen in the vendor
airline's market share between cities and in the overall performance of the airline at an
industry level. This paper models airline performance as a function of CRS ownership
at two levels: for selected city-pairs and at the overall level of the firm. The city-pair
analysis employs a multinomial logit market share model using five years of data on 72
routes. The industry model uses longitudinal data for a panel of ten airlines for twelve
years. The results of both analyses support hypotheses that CRS ownership is
positively related to airline performance, It appears that strong airlines have
appropriated the indirect benefits of their CRSs, turning them into highly specialized
assets for further travel-related innovation.|
|Appears in Collections:||IOMS: Information Systems Working Papers|
Items in Faculty Digital Archive are protected by copyright, with all rights reserved, unless otherwise indicated.