nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2010‒06‒11
two papers chosen by
Walter Frisch
University Vienna

  1. The complex interaction between Global Production Networks, Digital Information Systems and International Knowledge Transfers By Jarle Hildrum; Dieter Ernst; Jan Fagerberg
  2. Incumbent Response to Process Innovation: The Case(s) of E-Business Adoption By Kristina Steffenson McElheran

  1. By: Jarle Hildrum; Dieter Ernst; Jan Fagerberg
    Abstract: Traditionally many studies of knowledge in economics have focused on localized networks and intra-regional collaborations. However, the rising frequency by which firms collaborate within the context of global networks of production and innovation, the increasingly intricate divisions of labor involved and the extensive use of the Internet to facilitate interaction are all relatively novel trends that underline the importance of knowledge creation and flows across different locations. Focusing on this topic, the present chapter examines the complex interactions between global production networks (GPN), digital information systems (DIS) and knowledge transfers in information technology industries. It seeks to disentangle the various conduits through which different kinds of knowledge are transferred within such networks, and investigate how recent generations of DIS are affecting those knowledge transfers. The paper concludes that the dual expansion of GPN and DIS is adding new complexity to the practice of innovation: To access knowledge necessary for sustained creativity firms often have to link up with remote partners in GPN, but to be able to absorb and utilize this knowledge, they also frequently have to engage in local interactive learning processes. These local- global linkages - and the various skills necessary to operate them - are strongly interdependent, mutually reinforcing and critical for the development and maintenance of innovation-based competitiveness.
    Date: 2010–04
  2. By: Kristina Steffenson McElheran (Harvard Business School, Technology and Operations Management Unit)
    Abstract: This paper investigates how market position influences firm propensity to adopt new process innovations. Using detailed data from the U.S. Census of Manufactures, I study the adoption of frontier e-business practices during the early diffusion of the commercial internet. Consistent with conventional wisdom that leading firms are more likely to adopt incremental process innovations, I find evidence that larger firms in 1999 were far more likely than smaller firms to conduct indirect purchasing over the internet ("e-buying"). However, they were commensurately reticent to adopt e-selling. I argue that the best explanation is that e-selling was more radical an advance than is commonly understood and explore the notion that business process innovations can be disproportionately costly for larger firms if they require changes to core activities that also span the firm boundary.
    JEL: L21 O33 D24
    Date: 2010–05

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