DO INFORMATION TECHNOLOGY INVESTMENTS LEAD TO BIGGER OR SMALLER GOVERNMENTS? – THEORY AND EVIDENCE IN U.S. STATE GOVERNMENTS

Government growth has been a long-standing research issue among public economists as well as an important concern of the general public. This paper investigates the impact of government IT investments on government growth. Drawing on the literature on public economics, political sciences, and IT value, I offer theoretical discussions and four mechanisms as to the relationship between IT investments and government expenditures, leading to two competing hypotheses that IT investments either expand or shrink the amount of government expenditures. Using data on IT investments, state government finances, demography, and other institutional and socioeconomical factors, I test which prediction prevails in the context of U.S. state governments. The empirical investigations support the hypothesis that greater IT investments are associated with smaller state government size, measured as a ratio of annual total expenditures to state gross domestic product

Analyzing Pricing Strategies for Online-Services with Network Effect

In this study, we model firms that sell a product and a complementary online service, where only the latter displays positive network effects. That is, the value each consumer derives from the service increases with the total number of consumers that subscribe to the service. In addition, the service is valuable only to consumers who buy the product. We consider two pricing strategies: 1) bundle pricing, in which the firm charges a single price for the product and the service; and 2) separate pricing, in which the firm sets the prices of the product and the service separately, and consumers self-select whether to buy both or only the product. We show that, in contrast to the common result in the bundling literature, often the monopolist chooses not to offer the bundle (he either sells the service separately or not at all) while bundling would increase consumer surplus and social welfare. Thus, under-provision of the service can be the market outcome. We also demonstrate that network effects may cause the under-provision of the service.http://deepblue.lib.umich.edu/bitstream/2027.42/83713/1/1156_Etzion.pd

Complementary Online Services in Competitive Markets: How Firms Should Adjust Their Strategies Due to Network Effects

A growing number of firms are strategically utilizing IT and the Internet to provide online services to consumers who buy their products. Online services differ from traditional services, such as maintenance services, because they often promote interactivity among the firm’s customers and exhibit positive network effects. In this paper, we model the competition between two firms that sell a differentiated product, when each firm can offer a complementary online service to its customers. We examine how the market equilibrium changes when the service exhibits network effects, and determine how firms should adjust their strategies to account for such effects. Specifically, we find that when the service exhibits network effects, a firm’s decision whether to offer the service depends on the competitor’s decision as well as on the competitor’s service quality. When the service does not exhibit network effects, this is not the case. In addition, if the service exhibits network effects the two firms may be caught in a Prisoner’s Dilemma; a situation that does not arise in the absence of network effect. We also show that technological progress that enhances the value of the network to consumers can reduce firms’ profits when both offer the service. An increase in the size of the market can also have a negative effect on profits when the service exhibits network effects, but not otherwise. Finally, unlike previous works on products with network effects, showing under-provision in the context of a monopoly, we show that both under- and over-provision of services can arise in a competitive setting.http://deepblue.lib.umich.edu/bitstream/2027.42/83510/1/1155_Etzion.pd

Pricing of Products and Complementary Services: A Study of the Online Game Industry

We model a monopolist who offers a product and a complementary service, where only the latter exhibits positive network externalities. We focus on the online game industry as a representative case in which the product (the game), unlike the service (access to the interactive online play mode), has zero marginal cost, and consider two-potential pricing strategies: 1) the bundle pricing, in which the vendor charges a single price for the product and the service; and 2) the separate pricing, in which the vendor sets the prices of the product and the service separately. We find that, in contrast to the common result in the bundling literature, bundling may increase consumer surplus, while the monopolist chooses not to offer the bundle. We offer theoretical evidence that this is due to the presence of network externalities

That’s Mine! Employee Side Projects, Intellectual Property Ownership, and Innovation

Working on side projects outside their work hours is a growing trend for IT professionals. While employees might believe that everything they create in their spare time belongs to themselves, it is not always the case. In the legal case of Alcatel v. Brown, the court ruled that the employer owned rights to employees’ intellectual property including ideas of their side projects. Relatively little is known about how innovation activities are affected when employees are not allowed to retain the ownership of their intellectual property. We leverage the Alcatel v. Brown case as an exogenous shock and apply a difference-in-difference model to examine how the legal case affects innovation activities in different counties. We find that following Alcatel v. Brown, both patent counts and entrepreneurial activities decrease in counties where employees’ ownership of their intellectual property is not legally protected. We also find that the dampening effect is more pronounced in IT-related industries. Our work contributes to the literature on innovation management while providing practical implications for policy makers on intellectual property law

A Practical Guide for Successful Revisions and Engagements with Reviewers

Revising a manuscript after receiving a revise-and-resubmit decision from a top-tier journal can be just as arduous as developing a new paper from scratch. In this editorial, based on our experiences revising papers over the years, we provide roadmaps and guidelines for completing successful revisions for top journals. In doing so, we offer practical tips for completing three major tasks—making sense of a review packet, revising a manuscript, and crafting responses to reviewer comments. We conclude by recommending that authors be active reviewers themselves because, by doing so, they can develop their own insights on how peer review works and become more skillful at revising their papers and responding to reviewers

On Intelligent Transportation Systems and Road Congestion

Despite substantial investments in transportation infrastructures, road congestion in urban areas has not abated. While there is a growing interest among policymakers in intelligent transportation systems (ITS), the role of ITS in road congestion has not been established. To investigate the effect of ITS on road congestion, we utilized a unique dataset on traffic and ITS adoption from 99 U.S. urban areas in 2001-2008. The results from fixed-effects estimations show that ITS adoption reduces road congestion, saving an average driver 98 minutes of driving time and $38 per year. We also obtained preliminary evidence that ITS reduces carbon emissions by alleviating road congestion. Our findings extend the emerging IS literature on IT value in the public sector and the societal impacts of IT. Our study also contributes to the transportation economics literature and informs transportation policymakers by showing that ITS could be a cost-effective alternative to tackle road congestion

Information Technology and Value Creation in the Public Sector Organizations.

In this dissertation, I study the performance impact of information technology (IT) investments in the public sector. IT has been one of the key assets in public administration since the early MIS era. Even though the information systems (IS) discipline has witnessed a considerable amount of research efforts on the subject of IT business value for the last couple of decades, the study on IT value in governments has not been as extensive as in the for-profit domain. A broad range of literature search in the areas of IS, public administration, public economics, and political sciences shows that there have been a limited number of quantitative empirical studies on the performance impact of IT in public organizations. To fill this gap in the literature, the dissertation presents three studies with distinctive theoretical examining the IT value in the public sector. In the first study, drawing upon the public value management perspective from public administration and the literature on IT resources in the IS discipline, I lay a theoretical foundation for the mechanism in which IT resources contribute to the generation of public value. Specifically, I argue that IT resources create public value by facilitating the four key organizational capabilities in governments - operational capability, communication capability, partnering capability, and innovative capability. In the second study, I empirically measure the cost efficiency effect of IT investments in the context of U.S. state governments. Estimation with a stochastic frontier estimation approach with the cost function framework shows that there is a significant efficiency improvement effect of IT in state governments. In the third study, the performance effect of IT is analyzed from the government growth perspective. Theories on government growth in political sciences and public economics provide theoretical predictions on the influence of IT on government expenditures as well as a basis for empirical estimation. I find that IT investments are associated with smaller expenditure size in U.S. state governments. Overall, this dissertation contributes to the literature by offering a theoretical framework, empirical methodologies, and conclusive evidence showing the value creation effect of IT in the public sector.Ph.D.Business AdministrationUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/86436/1/noticeme_1.pd

Mitigating traffic congestion: the role of intelligent transportation systems

Despite massive investments in transportation infrastructure, traffic congestion remains a major societal and public policy problem. Intelligent transportation systems (ITS) have been proposed as a potential solution to this challenge, but their effectiveness has remained unclear in both research and practice. To understand whether and how ITS affect traffic congestion, we consolidate a unique longitudinal data set on road traffic and the deployment of a large federally supported ITS program in the United States-511 systems-in 99 urban areas between 1994 and 2014. The difference-in-differences estimates show that the adoption of 511 systems is associated with a significant decrease in traffic congestion, saving over $4.7 billion dollars and 175 million hours in travel time annually in U.S. cities. 511 systems also reduce about 53 million gallons of fossil fuel consumption and over 10 billion pounds of CO2 emissions. We offer two theoretical explanations for this effect: (i) ITS help individual commuters to make better travel decisions, and (ii) ITS help local governments to develop an urban traffic management capability. Empirical evidence supports the underlying theoretical mechanisms and shows that ITS help commuters to schedule travel more efficiently, choose better navigation routes, and optimize their worktrip transportation mode. Second, the effect of ITS is contingent on road supply and public transit services. We also find that the traffic-reducing effect of ITS is larger when commuters use more online services for traffic information and when state governments incorporate more functionalities into their 511 systems. This study contributes to the literature on IT capabilities, public-sector IT value, and the societal impact of IT, while also extending the transportation economics to IT-enabled traffic interventions. Finally, we inform policymakers of ITS as a cost-effective means to mitigating traffic congestion

Co-chaperone BAG2 Determines the Pro-oncogenic Role of Cathepsin B in Triple-Negative Breast Cancer Cells

Triple-negative breast cancer (TNBC) is considered incurable with currently available treatments, highlighting the need for therapeutic targets and predictive biomarkers. Here, we report a unique role for Bcl-2-associated athanogene 2 (BAG2), which is significantly overexpressed in TNBC, in regulating the dual functions of cathepsin B as either a pro- or anti-oncogenic enzyme. Silencing BAG2 suppresses tumorigenesis and lung metastasis and induces apoptosis by increasing the intracellular mature form of cathepsin B, whereas BAG2 expression induces metastasis by blocking the auto-cleavage processing of pro-cathepsin B via interaction with the propeptide region. BAG2 regulates pro-cathepsin B/annexin II complex formation and facilitates the trafficking of pro-cathespin-B-containing TGN38-positive vesicles toward the cell periphery, leading to the secretion of pro-cathepsin B, which induces metastasis. Collectively, our results uncover BAG2 as a regulator of the oncogenic function of pro-cathepsin B and a potential diagnostic and therapeutic target that may reduce the burden of metastatic breast cancer