Production and Operations Management 2026
EXPRESS: How Information Technology and R&D Investments Influence Geographic Dispersion and Production Costs: Evidence from US Multinational Manufacturers
Abstract
How do information technology (IT) and R&D investments jointly shape the global dispersion of multinational manufacturers’ operations and their production costs? We argue that IT enhances a firm’s ability to leverage R&D-induced technological competence across different regions, facilitating the geographic dispersion of internal supply chain units and subsidiaries. In addition, IT helps firms extract greater value from geographic dispersion in terms of reduced production costs via enhanced coordination, control, and connectivity. Using rare archival firm-level data on US-based multinational manufacturers for the 1994–2009 period, we test these arguments and document two major findings. First, IT intensity positively moderates the relationship between R&D intensity and geographic dispersion. Second, IT intensity negatively moderates the relationship between geographic dispersion and production costs. Together, these findings highlight the critical role of IT in amplifying the effect of R&D on geographic dispersion, and in turn, the effect of geographic dispersion on production cost advantages. Overall, the findings suggest that investments in IT systems and resources help mitigate coordination challenges in leveraging technological competence for global dispersion and managing dispersed global supply chains for superior firm performance.
- DOI
- 10.1177/10591478261458078
- Sources
- openalex