The Impacts Of Open And Proprietary IT On Vertical Firm Boundaries

The extensive application of information technology(IT)has helped firms reduce the cost of information processing and facilitate the transmission and communication of information.More and more researchers are interested in studying the influence of information technology on enterprises.And the influence on vertical firm boundaries is one of the research focuses.Most studies only focus on the effects of the overall information technology on vertical firm boundaries.Few literatures discuss the information technology separately.To further understand the impacts of information technology on vertical firm boundaries,this paper divides information technology into two categories,open IT and proprietary IT.And based on the research at home and abroad,we propose that the impacts of open IT and proprietary IT on vertical firm boundaries are different with each other.We also introduce three environmental factors,industry dynamism,industry munificence and industry concentration,representing the industry environment.IT is hypothesized that these industrial environmental factors have moderating effects on the impacts of open IT and proprietary IT on vertical firm boundaries.With the annual industry data from U.S.Bureau of Economic Analysis,we used statistical analysis software to empirically test these hypotheses.The results show that open IT helps reduce vertical firm boundaries while proprietary IT helps expand vertical boundaries.Moreover,industry dynamism strengthens the impacts of open IT and proprietary IT on vertical firm boundaries.Industry munificence weakens the influence of open IT and proprietary IT on vertical firm boundaries.Industry concentration weakens the influence of open IT on vertical firm boundaries,but IT doesn't have a significant moderating effect on the relationship between proprietary IT and vertical firm boundaries.Overall,the findings of this study provide implication for academic research and business practice.