User:Formefortoo/sandbox

It has long been believed that information technology (IT) has the potential to shift the boundaries surrounding where production takes place. Specifically, networked IT investments are supposed to reduce costs of monitoring behavior of internal and external partners, thereby improving incentives and reducing the risk of opportunistic behavior. Networked IT can also reduce costs of coordinating economic activity within and between firms. This study, by Chris Forman and Kristina McElheran, explores how IT investments influence vertical integration in supply chain relationships. Key concepts include:

The adoption of supplier-focused IT has an economically and statistically significant negative impact on the percentage of downstream within-firm transfers.Somewhat surprisingly, adoption of customer-focused IT has no significant effect on the percentage of downstream transfers. Adoption of supplier-focused IT has the largest impact on within-firm transfers when adopted in conjunction with customer-focused IT.

by manoj kumar