Information technology, productivity, and asset ownership: Evidence from taxicab fleets

Evan Rawley, Timothy S. Simcoe

Research output: Contribution to journalArticlepeer-review

15 Scopus citations

Abstract

We develop a simple model that links the adoption of a productivity-enhancing technology to increased vertical integration and a less skilled workforce. We test the model's key prediction using novel microdata on vehicle ownership patternsfrom the Economic Census during a period when computerized dispatching systems were first adopted by taxicab firms. Controlling for time-invariant firm-specific effects, firms increase the proportion of taxicabs under fleet ownership by 12% when they adopt new computerized dispatching systems. An instrumental variables analysis suggests that the link between dispatching technology and vertical integration is causal. These findings suggest that increasing a firm's productivity can lead to increased vertical integration, even in the absence of asset specificity.

Original languageEnglish (US)
Pages (from-to)831-845
Number of pages15
JournalOrganization Science
Volume24
Issue number3
DOIs
StatePublished - May 1 2013

Keywords

  • Asset ownership
  • Capabilities
  • Information technology
  • Productivity
  • Vertical integration

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