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

Evan Rawley () and Timothy S. Simcoe ()
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Evan Rawley: Columbia Business School, New York, New York 10027
Timothy S. Simcoe: School of Management, Boston University, Boston, Massachusetts 02215

Organization Science, 2013, vol. 24, issue 3, 831-845

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 patterns from 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.

Keywords: information technology; vertical integration; asset ownership; productivity; capabilities (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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