Product Differentiation and the Use of Information Technology: New Evidence from the Trucking Industry / Atreya Chakraborty, Mark Kazarosian.

Format:

Book

Author/Creator:

Chakraborty, Atreya.

Contributor:

National Bureau of Economic Research.

Kazarosian, Mark.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7222.

NBER working paper series no. w7222

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Product Differentiation and the Use of Information Technology

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Summary:

Since the mid-1980s many authors have investigated the influence of information technology (IT) on productivity. Until recently there has been no clear evidence that productivity increases as a result of IT spending. This productivity paradox is partly due to the difficulty in correctly identifying outputs, particularly in the service sector such as the trucking industry. Products are often differentiated by quality attributes of the service provided, rather than merely the physical content of the good delivered by motor carriers. A carrier's primary marketing objective, e.g. on-time-performance vs. lowest rate carrier, are precisely what differentiates a trucking firm's service. This paper uses cross-sectional data to show that the use of increasingly sophisticated IT by trucking firms varies depending upon marketing objectives. Our empirical results imply that in order to measure the impact of IT on productivity it is crucial to account for how the firm differentiates its product. We conclude that the productivity paradox can be alleviated if measures of output incorporate firms' marketing objectives.

Notes:

Print version record

July 1999.