Essays on Information Systems in Transaction Sector Costs and Transaction Process Design

This thesis is comprised of two essays. The first essay is a longitudinal study of costs in the transaction and information sectors of the United States economy. We begin with the seminal work of Wallis and North (1986) that reported labour costs in the transaction sector between 1870 and 1970 and develop a novel methodology that extends this work to 2006. We find that the share of US gross national product attributable to transaction service costs declined 22.78 percentage points between 1970 and 1980. This decline was substantially due to transaction cost reductions in four industry super-sectors: manufacturing, government, retail, and services, and labour cost reductions in management, clerical, and sales workers.;The second essay is an empirical study of an industry-level information system technology in the oil and gas sector. Using a novel data set obtained through the Freedom of Information and Protection of Privacy Act (Alberta) and matched with an industry survey, we apply the tri-core model for information systems in organizational design and measure alignment of the operationalization of information system transaction inputs with the strategic orientation of the organization. The degree of alignment between an organization's centralized and decentralized design and the design of its administration, information system, and technical operations is found to be a mechanism for the information system's mediation of the organization's performance. Organizational performance is partially explained by organizational size and the alignment between design and the stability of the business environment, or the amount of uncertainty that must be managed by the organizational design. Our analysis indicates that performance improves when there is alignment between a centralized design in the administrative and technical cores in a stable business environment.;We specify a partitioned Cobb-Douglas production function showing that production labour and transaction labour inputs have different output elasticities and that investment in transaction labour consistently provides the greatest returns to output. We also specify a Cobb-Douglas model using variable coefficients that describes the relationship between transaction labour costs and information technology capital where information technology capital shifts more of the returns from production labour to transaction labour. The model anticipates that if information technology capital investment increased between 1970 and 1980 then the observed decline in transaction labour cost would have resulted.