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Chang, Young Bong
School of Business Administration
Research Interests
  • Economics of Information Systems Information Technology
  • Outsourcing Competition and Information Technology Value Creation
  • Organizational Impacts of Information Technology Supply Chain
  • Management

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Does RFID improve firms' financial performance? an empirical analysis

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Title
Does RFID improve firms' financial performance? an empirical analysis
Author
Chang, Young Bong
Keywords
Business value of IT; Economics of information systems; Financial performance; RFID; Supply chain management
Issue Date
2011-09
Publisher
Baltzer Science Publishers
Citation
Information Technology and Management, v.12, no.3, pp.273 - 285
Abstract
Radio frequency identification (RFID) is viewed as a technology that improves supply chain efficiency by enhancing inventory efficiency, optimizing logistics, and coordinating the flow of materials. Although RFID has gained great attention in many business applications, the financial gain that accrues over time from RFID adoption is not well understood. We examine the effects of RFID on firm profits while adjusting for selfselection of adoption choice. We find that firms self-select into a certain adoption mode on the basis of their organizational characteristics. Our results also show that RFID confers significant benefits for firms that have adopted RFID. Interestingly, improved inventory ratio and sales efficiency begin to play a greater role in shaping higher profitability over time for firms that have adopted RFID possibly due to time-consuming processes for them to reap the benefits from RFID. However, we find that the values of RFID that accrue to firms are not universal across firm. That is, our results suggest that RFID confers a significant value for certain firms while it does not for other firms with unobservable disadvantages. In sum, our study sheds new light on what drives firms to adopt RFID and on which firms achieve higher financial performance in a postadoption period as a result of RFID adoption.
URI
https://scholarworks.unist.ac.kr/handle/201301/8827
DOI
10.1007/s10799-011-0088-3
ISSN
1573-7667
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SBA_Journal Papers
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