Come Together, but How? How the Structure of Record Labels’ Project-based Production Affects the Implementation of MP3



We investigate how the structure of firms’ relationships with their suppliers influences their implementation of a new technology in project-based production, a setting where production is organized based on collaborations between firms and suppliers. Coordination problems are endemic to project-based production because the co-production relationships between firms and suppliers are typically temporary and discontinuous, and the suppliers can work simultaneously on multiple projects with different firms. Prior research suggests that these coordination problems can make it difficult for project-based production firms to implement new technologies. We argue that two structural characteristics of project-based production firms can mitigate the coordination problems and increase the likelihood of technology implementation – having co-production relationships with suppliers who tend to concentrate work with the focal firm, and collaborating repeatedly with the same suppliers over time. We also argue that suppliers’ concentration and repeated collaborations are substitutable, rather than complementary, mechanisms for facilitating technology implementation. We find evidence supporting our predictions in the U.S. music recording industry between 1995 and 2005, where record labels were confronted with implementing a new media technology, MP3.

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Meeting ID: 946 0823 2228