Determinants of Electronic Integration in the Insurance Industry: An Empirical Test
Management Science · 1994 · Volume 40 · Issue 5
Abstract
Electronic integration—a form of vertical quasi-integration achieved through the deployment of dedicated computers and communication systems between relevant actors in the adjacent stages of the value-chain—is an important concept to researchers in the information systems field since it focuses on the role of information technology in restructuring vertical relationships. Drawing on theoretical and empirical research on transaction costs, we develop and test a model of the determinants of the degree of electronic integration in the commercial segment of the property and casualty (P&C) industry. Based on a sample of 120 independent agencies operating under dedicated information technology-mediated conditions, we provide empirical support for three hypotheses on the determinants of electronic integration. Implications and research extensions are identified to guide further research in this important area.
Keywords
information technology, vertical integration, electronic integration, interorganizational systems, organizational economics, transaction cost model, insurance industry, commercial lines
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