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Are Foreign and Domestic Information Technology Professionals Complements or Substitutes?

2022 | Management Information Systems Quarterly | Citations: 1
Authors: Mithas, Sunil; Chen, Yanzhen; Liu, Che-Wei; Han, Kunsoo

Abstract: The globalization of work raises important questions related to the employment o ... Expand

Abstract: The globalization of work raises important questions related to the employment of workers across geographies and how the complementarity or substitution of workers across country borders influences firm profitability. In particular, tension often exists regarding the substitution or complementarity of workers located outside the U.S. or within the U.S. for American firms. We investigate this question in the context of information technology (IT) professionals and assess how domestic and foreign IT professionals contribute to firm profit by utilizing a rare firm-level dataset with information on the locational composition of IT professionals within and outside the U.S. Exploiting a labor market supply-side exogenous shock induced by the American Competitiveness in the Twenty-First Century Act (AC21), which increased the availability of H-1B visas in the U.S. in 2001, we find that foreign IT professionals located offshore and American IT professionals located onshore complement each other in generating profits. Our model and empirical findings are important both for informing firm choices and for shaping and creating public policies that so far appear to have been informed more by emotion than by data and science. Collapse

Semantic filters: economic production theory

Topics: IT workforce IT job research and development outsourcing offshoring

Methods: instrumental variables estimation robustness check Compustat survey econometric modeling

Theories: theory of economic recessions economic production theory
The different effects of hardware and software on production interdependence in manufacturing
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2021 | Decision Support Systems | Citations: 0
Authors: Gong, Fengmei; Cheng, Zhuo (June); Nault, Barrie R.

Abstract: Make or buy decisions are often decisions between investing in capital for produ ... Expand

Abstract: Make or buy decisions are often decisions between investing in capital for production or building supply chain relationships upstream. These are strategic decisions about production interdependence: the degree to which materials and services are provided internally versus purchased externally. Information technology (IT) has increased productivity with hardware and software such as robotics and flexible manufacturing systems. IT has also improved information sharing and coordination along the supply chain by integrating business processes with software. Within manufacturing, we examine whether hardware and software are related to choices of make versus buy differently. From a transaction cost perspective this can be due to differential impacts on reducing internal production costs versus external coordination costs. We find that in U.S. manufacturing industries from 1998 to 2016, hardware favors internal production suggesting hardware reduces costs of internal provision more; software increased purchases from upstream suppliers suggesting software reduces costs of external provision more. This result shows that hardware and software complementarity has limits in that each has distinct pro ductivity targets, and that empirically the decision of make versus buy is manifested by investments in these different types of IT capital. That is, when facing strategic decisions about make versus buy in manufacturing, hardware and software have opposite impacts. Collapse

Semantic filters: economic production theory

Topics: computer hardware productivity intellectual property IT investment business process management

Methods: longitudinal research autocorrelation analysis econometric modeling chi squared test instrumental variables estimation

Theories: transaction cost economics economic production theory
BUSINESS VALUE OF SMART CONTRACT: CASE OF INVENTORY INFORMATION DISCREPANCIES

2020 | Americas Conference on Information Systems | Citations: 0
Authors: Padalkar, Nakul; Sheikh-Zadeh, Alireza; Song, Jaeki

Abstract: Firms are increasingly interested in Blockchain Smart Contracts as a solution f ... Expand

Abstract: Firms are increasingly interested in Blockchain Smart Contracts as a solution for the visibility of the digital supply chain. Blockchain can help realize the cost reductions by providing a "single version of the truth" for a firm and its trading partners. By sharing important information such as inventory levels, manufacturing performance and operations indicators, and order and shipment information, firms can eliminate the delays and uncertainties in the information that contributes to "the bullwhip effect" and inflates required buffer stock. This paper focuses on the impact of blockchain in an inventory operation to cope up with information discrepancies. We present and compare the cost differences between an existing technology (like EDI) and blockchain. Using technologies like blockchain and smart contracts will enable a more transparent, sustainable, and resilient supply chain. Collapse

Semantic filters: economic production theory

Topics: blockchain smart contract electronic data interchange information exchange supply chain management

Methods: mathematical model

Theories: mathematical theory economic production theory
The Strategic Value of Information Technology in Setting Productive Capacity
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2019 | Information Systems Research | Citations: 0
Authors: Zhang, Dawei (David); Nault, Barrie R.; Wei, Xueqi (David)

Abstract: Capacity is the maximum short-run output with capital in place under normal oper ... Expand

Abstract: Capacity is the maximum short-run output with capital in place under normal operations, and capital investment increases capacity. Excess capacity can be used as an economic strategy for entry deterrence by lowering average costs over a greater range of output, and as an operations strategy by providing value through ﬂexibility to manage demand ﬂuctuations and production disturbances. Our primary focus is to study the way that information technology (IT) can contribute to a strategy of holding excess capacity by comparing the relationship between IT capital and capacity with that of non-IT capital and capacity. Using production theory–based empirical analyses, we ﬁnd that increases in IT capital yield almost fourfold greater expansion in capacity than do increases in non-IT capital. Thus, as both types of capital are constraints on capacity, for a strategy of holding excess capacity IT capital is a more valuable constraint to relax than non-IT capital. In addition, since the late 1990s, IT capital, and to a lesser extent, non-IT capital, has reduced capacity utilization (output/capacity), meaning increasing levels of excess capacity are being held across manufacturing industries and utilities across the economy. Collapse

Semantic filters: economic production theory

Topics: productivity internet technology enterprise information system website economies of scale

Methods: longitudinal research autocorrelation analysis chi squared test cross sectional research time series analysis

Theories: economic production theory
Mindful Engagement in Emerging IT Innovations: A Dynamic Optimization Model Considering Organizational Learning in IT Innovation Investment Evaluation
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2017 | ACM SIGMIS Database | Citations: 0
Authors: Häckel, Björn Steven; Lindermeir, Andreas; Moser, Florian; Pfosser, Stefan

Abstract: Companies regularly have to decide whether, when, and to what extent to invest i ... Expand

Abstract: Companies regularly have to decide whether, when, and to what extent to invest in IT innovations with different maturities. Together with mature IT innovations, companies should incorporate emerging IT innovations in their investment strategy. Emerging IT innovations have not yet been widely accepted. Thus, they are characterized by higher uncertainty about their future evolution but have potentially high long-term returns. To enable mindfulness in these decision-making processes, the literature emphasizes organizational learning through continuous engagement in IT innovations to enhance a company?s ability to understand, successfully adopt, and implement emerging IT innovations. IT innovation literature so far has focused on qualitative work, but lacks of quantitative models for the analysis of ex-ante investment decisions. Therefore, we develop a dynamic optimization model that determines the optimal allocation of an IT innovation budget to mature and emerging IT innovations, considering the impact of organizational learning. Based on our model, we examine relevant causal relationships by analyzing the influence of uncertainty, a company?s initial individual innovativeness, and the market?s average investment share on the optimal engagement. We find that companies should always invest at least a small portion of their budget in emerging IT innovations, regardless of their actual innovativeness. Our results offer new insights into the crucial determinants of investment decisions and provide the basis for future quantitative research on emerging IT innovations. Collapse

Semantic filters: economic production theory

Topics: digital innovation organization learning innovation management decision making IT investment

Methods: sensitivity analysis optimization model simulation Monte Carlo simulation mathematical model

Theories: organizational learning theory economic production theory innovation theory
An Internet-Enabled Move to the Market in Logistics
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2016 | Information Systems Research | Citations: 0
Authors: Gong, Fengmei; Nault, Barrie R.; Rahman, Mohammad S.

Abstract: Logistics outsourcing has increased with the commercialization of the Internet, ... Expand

Abstract: Logistics outsourcing has increased with the commercialization of the Internet, implying a reduction in the corresponding transaction costs. The Internet—with its universal connectivity and open standards—radically enhanced information technology (IT) capabilities, and we hypothesize this has reduced external transaction costs relatively more than internal governance costs. Using transaction cost theory as a lens, we examine whether the commercialization of the Internet coincided with a move to the market in logistics—one of the most connected industries in the economy. We estimate the relationship between IT and outsourced logistics in a production function based on two data sets from 1987 to 2008. We find that the effects of IT on outsourced logistics have changed in the post-Internet era. After the commercialization of the Internet, an industry’s own IT investment and outsourced logistics became complements, whereas they were not before. It suggests that because of the unique characteristics of the Internet as an enabler, IT reduced external transaction costs relatively more than internal governance costs. Consequently, industries favored the market form of the provision of logistics. We also find similar impacts of customers’ IT investments on a focal industry’s outsourced logistics. Previous studies argued that IT led to the shift from hierarchies to markets, or provided indirect evidence through measures of firm size or integration. Using a production theory model, our study provides systematic empirical evidence to support that the Internet enabled a move to the market in the provision of logistics. Collapse

Semantic filters: economic production theory

Topics: logistics management internet technology IT investment outsourcing supply chain management

Methods: longitudinal research econometric modeling likelihood-ratio test autocorrelation analysis time series analysis

Theories: transaction cost economics economic production theory
Assessing the values of EC and IT separately and simultaneously and inputs substitution and complement: The CES-based stochastic frontier approaches
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2016 | Information & Management | Citations: 0
Authors: Lin, Winston T.; Chen, Yueh H.; Chou, Chia-Ching

Abstract: The objective of this research is to critically explore four interrelated issues ... Expand

Abstract: The objective of this research is to critically explore four interrelated issues at the country level by evaluating the values of e-commerce (EC) and information technology (IT) both separately and simultaneously; examining the possibilities of complementarity and substitutability phenomena; analyzing the impacts of substitution and complement relations among ordinary capital, ordinary labor, and IT capital on the business values of EC and IT; and revisiting the productivity paradox by using the stochastic frontier approaches, which incorporate the CES production functions. The empirical results imply that it is important to assess the values of EC and IT simultaneously rather than separately. Collapse

Semantic filters: economic production theory

Topics: productivity organizational value electronic commerce IT investment

Methods: statistical hypothesis test longitudinal research literature study

Theories: economic production theory
The Emergence of Intra-Organizational Communities of Operations: Evidence from the Software Industry

2014 | International Conference on Information Systems | Citations: 0
Authors: Beckhaus, Arne; Neumann, Dirk; Karg, Lars

Abstract: We contemplate the concept of intra-organizational communities of operation to a ... Expand

Abstract: We contemplate the concept of intra-organizational communities of operation to account for the organizational design that has recently emerged. Intra-organizational communities of operation address operative tasks of information workers within the boundaries of a firm. By relying on community principles such as self-coordination and intrinsic motivation, this design is believed to be highly scalable and efficient. In order to understand the mechanisms of how these communities function, we develop a research framework aiming to explain performance by means of constructs adapted from conventional group research. We evaluate our model in an empirical study at a large software vendor in its bug tracking process. We find that community centrality, informal roles, and heterogeneity are associated with performance while sub-network centralization and size are not. Our findings will motivate managers to benefit from intra-organizational communities’ flexibility and scalability and assist them in the design process by unveiling the mechanisms that influence performance. Collapse

Semantic filters: economic production theory

Topics: problem solving business function knowledge management business process management economies of scale

Methods: robustness check theory development literature study descriptive statistic ordinary least square

Theories: resource based view of the firm economic production theory
Total factor productivity growth in information technology services industries: A multi-theoretical perspective
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2014 | Decision Support Systems | Citations: 0
Authors: Chou, Yen-Chun; Shao, Benjamin B. M.

Abstract: Information technology (IT) services refer to the delivery and support of IT ope ... Expand

Abstract: Information technology (IT) services refer to the delivery and support of IT operations and activities in order to satisfy business requirements and to manage IT infrastructure for organizations. Considered part of knowledge-intensive business services, IT services provide an output used by other sectors and play an increasingly important role in the services-based economy. Based on the theories of production, innovation and competition, we study total factor productivity growth of IT services industries in 25 Organization of Economic Cooperation and Development (OECD) countries over the period of 1995 to 2007 using Malmquist productivity index (MPI) as the performance metric and data envelopment analysis (DEA) as the measurement methodology. We then further decompose MPI into three components that provide a full analysis: technical change (for innovation), efficiency change (for catch-up), and scale change (for demand fluctuation). These IT services industries are found to show notable productivity growth when compared with other services industries, the services sector as a whole, and the economy at large. Through a multi-theoretical lens, our breakdown analysis reveals that the IT services industry is an innovator adept at making technological progress that becomes the key driver behind observed productivity growth; efficiency change exerts a relatively small negative impact; and scale change being mainly decided by client demands impairs productivity. Implications for IT services at both country and industry levels are drawn from our findings to provide suggestions for policymaking and strategy formulation. Collapse

Semantic filters: economic production theory

Topics: productivity innovation management electronic commerce internet technology database system

Methods: trade-off analysis method data envelopment analysis longitudinal research descriptive statistic

Theories: economic production theory
ON THE USE OF DISCRETE EVENT SIMULATION IN GREEN IS RESEARCH - DEVELOPING A CONCEPTUAL FRAMEWORK

2014 | European Conference On Information Systems | Citations: 0
Authors: Stiel, Florian

Abstract: Discrete event simulation is a widely established approach in research on supply ... Expand

Abstract: Discrete event simulation is a widely established approach in research on supply chain structures. However, discrete event simulation is rarely used within the context of environmental sustainability. A conceptual framework is suggested to discuss the value of discrete event simulation in Green IS research. The content of the framework is based on a systematic literature review and the structure builds upon the belief-action-outcome model. The framework contains research issues for the use of discrete event simulation in Green IS research and illustrates the causal relations between organizational, social and physical structures, individual objects as well as the outcomes in their interaction. A methodological toolkit is included to provide a starting point for the development of suitable research methodologies within the field. Due to the interdisciplinary approach of this work, the framework may be restrictive in its view on information systems. Therefore, the results do not claim to be deterministic or constrictive. Scientists and practitioners are encouraged to enter the discourse on discrete event simulation to enhance Green IS research. Collapse

Semantic filters: economic production theory

Topics: green IS environmental sustainability public good logistics management climate change

Methods: literature study structured literature research simulation discrete event simulation experiment

Theories: economic production theory general systems theory economic theory stakeholder theory belief action outcome model

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Found 27 articles

Are Foreign and Domestic Information Technology Professionals Complements or Substitutes?

The different effects of hardware and software on production interdependence in manufacturing

BUSINESS VALUE OF SMART CONTRACT: CASE OF INVENTORY INFORMATION DISCREPANCIES

The Strategic Value of Information Technology in Setting Productive Capacity

Mindful Engagement in Emerging IT Innovations: A Dynamic Optimization Model Considering Organizational Learning in IT Innovation Investment Evaluation

An Internet-Enabled Move to the Market in Logistics

Assessing the values of EC and IT separately and simultaneously and inputs substitution and complement: The CES-based stochastic frontier approaches

The Emergence of Intra-Organizational Communities of Operations: Evidence from the Software Industry

Total factor productivity growth in information technology services industries: A multi-theoretical perspective

ON THE USE OF DISCRETE EVENT SIMULATION IN GREEN IS RESEARCH - DEVELOPING A CONCEPTUAL FRAMEWORK