THE IMPACT OF CUSTOMER-SIDE IT INVESTMENTS ON FIRM PRODUCTIVITY

This paper develops and empirically tests theory on the impact of IT investments made by customers on focal firm’s productivity. It is found that in general an increase in IT investment made by customers is associated with an increase in the focal firm’s productivity. On the other hand, the benefits a firm receives from its customers are moderated by (1) how the firm is forwardly integrated in the supply chain and (2) the relative concentration level of its customer industries.

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