Browsing by Author "Gong, Fengmei"

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    An internet-Enabled Move to the Market in Logistics
    (2016-01-21) Gong, Fengmei; Nault, Barrie R.; Rahman, Mohammad Saifur
    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 datasets 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.
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    Studies on IT, Logistics, and the Structure of Production
    (2015-01-29) Gong, Fengmei; Nault, Barrie
    Information Technology (IT) has changed how firms and industries run their businesses and how they organize production. This thesis examines the relationships between IT and three important aspects of production organization: the usage of logistics outsourcing, the interde-dependence with upstream suppliers for intermediate inputs, and the structure of production in an economy. The first essay examines whether the advent of the Internet coincided with a move to the market in one of the most connected industries in the economy: logistics. We find that the effects of IT on outsourced logistics have changed with the advent of the Internet. The second essay examines the impact of an industry’s IT investment on its production interdependence with upstream suppliers, where we measure interdependence as direct backward linkage (DBL), and examines the relationship among DBL, total factor productivity (TFP), and value-added. We find that an industry’s IT investment reduces its production interdependence with suppliers and leads to greater value-added. The third essay explores the relationship between IT and the structure of production in an economy. We take a unique perspective, network analysis, to generate a variety of measures of the structure of production which we categorize as connectivity among industries in an ego-centric network and concentration in an ego industry’s supplying market. It is found that an industry’s IT investment is associated with an increase in the connectivity within its supplying network and a decrease in concentration in the supplying market.