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Operations Management Research

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04-09-2023

Strategic data capital investment in a supply chain

Authors: Baogui Xin, Yue Liu, Lei Xie

Published in: Operations Management Research | Issue 4/2023

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Abstract

Digital transformation needs two essential phases of endeavors: digitalizing and data-driving business activities. The former involves much ICT capital investment that was widely studied, while the latter requires ongoing data capital investment (DCI) with many research gaps. Thus, firms face a trade-off dilemma in an input–output decision for DCI. To overcome the dilemma and fill such a gap, we first employ grounded theory to explore the underlying mechanisms of DCI to create value. Second, we construct a DCI-embedded game model and analyze DCI's economic effects under three supply chain power structures. Last, we conduct a case study to verify the main findings. The results suggest that: (i) supply chain firms can boost their profits through DCI only when the DCI implementation cost and level are within specific ranges; (ii) DCI has a positive vertical externality in the supply chain; and (iii) a firm will be more likely to implement DCI when it has a stronger market position in the supply chain.

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Title: Strategic data capital investment in a supply chain
Authors: Baogui Xin
Yue Liu
Lei Xie
Publication date: 04-09-2023
Publisher: Springer US
Published in: Operations Management Research / Issue 4/2023
Print ISSN: 1936-9735
Electronic ISSN: 1936-9743
DOI: https://doi.org/10.1007/s12063-023-00402-y

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