Essays on the effects of information technology and the Internet on business environments

Yasin Ozcelik, Purdue University


In this thesis, we investigate the effects of Information Technology (IT) and the Internet on business environments from three perspectives: the catalyst function of IT and the Internet in developing new business models, the enabler role of these technologies for emerging digital marketplaces, and their transforming effects on organizational measures such as productivity. The first essay analyzes a novel e-commerce model that reinforces loyalty on the Internet by giving customers a fraction of merchant firm's stock for each purchase. We compare this model with online cash-back reward programs by developing a two-period duopoly model in which one of the firms gives customers a fraction of its stock and the other offers cash-back for each purchase. We find that stock-based e-loyalty programs are suitable for new start-up companies with low market shares, operating in large markets where consumers can easily switch between firms. The significance of our findings is that these conditions are available in Business-to-Consumer (B2C) markets, making them appropriate media to implement stock-based e-loyalty programs. The second essay introduces an emerging digital medium, called Donor-to-Organization (D2O) marketplace, which brings donors and fundraising organizations together in an electronic environment to facilitate finding a suitable match. We first investigate possible outcomes of using the D2O marketplace in traditional fundraising environments, and then develop a nonprofit duopoly model based on spatial competition. Using this model, we find analytical conditions under which implementing the D2O marketplace as a secondary channel in fundraising markets generates better outcomes. Finally, the last essay is an empirical study that examines whether the Business Process Reengineering (BPR) efforts of companies to leverage potential benefits of using IT in their functional units improve their productivity. We construct three productivity measures that are suitable for both the inter-organization and intra-organization comparisons. Using a firm-level data from two different economic sectors covering the period between 1985 and 2004, we employ a one-way panel regression model. Depending on the economic sectors of the firms, our results show that the reengineering efforts supported by IT improve some of these productivity variables during the period under consideration.




Altinkemer, Purdue University.

Subject Area

Management|Business costs|Marketing

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