nep-ict 2009-11-21 papers

on Information and Communication Technologies

Issue of 2009‒11‒21
one paper chosen by
Walter Frisch
University Vienna

Information Technology, Capabilities and Asset Ownership: Evidence from Taxicab Fleets By Evan Rawley; Tim Simcoe

Information Technology, Capabilities and Asset Ownership: Evidence from Taxicab Fleets

By:	Evan Rawley; Tim Simcoe
Abstract:	We examine how information technology (IT) influences asset ownership through its impact on firms’ and agents’ capabilities. In particular, we propose that when IT is a substitute for agents’ industry-specific human capital, IT adoption leads to increased vertical integration. We test this prediction using micro data on vehicle ownership patterns from the Economic Census during a period when computerized dispatching systems were first adopted by taxicab firms. The empirical tests exploit exogenous variation in local market conditions, to identify the impact of dispatching technology on firm asset ownership. The results show that firms increase the proportion of taxicabs owned by 12% when they adopt new computerized dispatching systems. The findings suggest that firms increasingly vertically integrate when they acquire resources that substitute for their agents’ capabilities.
Date:	2009–11
URL:	http://d.repec.org/n?u=RePEc:cen:wpaper:09-39&r=ict

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