Speaker(s): Andy McAfee (HBS)
Title:
Abstract
I will present evidence of a positive
relationship between the 'IT Intensity' of an industry (as measured by the share
of total tangible wealth represented by IT) and post-1995 increases in its
level of concentration. This relationship persists across several
model specifications and dependent variable operationalizations, and after the
inclusion of controls for industry size and the intensity of other types of
tangible wealth. I then discuss possible reasons for this relationship.
Existing theories of the impact of IT generally predict that increasing
penetration of IT will lead to the dispersal of economic activity, and to more
competitive industries. In explaining these counter-theoretical empirical
findings, I concentrate on the significant organizational and managerial
challenges involved in acquiring some types of IT endowment, and on the different
endowments required across industries.