DETERMINANTS OF ELECTRONIC INTEGRATION IN THE INSURANCE INDUSTRY - ANEMPIRICAL-TEST

Electronic integration-a form of vertical quasi-integration achieved t hrough the deployment of dedicated computers and communication systems between relevant actors in the adjacent stages of the value-chain-is an important concept to researchers in the information systems field s ince it focuses on the role of information technology in restructuring vertical relationships. Drawing on theoretical and empirical research on transaction costs, we develop and test a model of the determinants of the degree of electronic integration in the commercial segment of the property and casualty (P&C) industry. Based on a sample of 120 ind ependent agencies operating under dedicated information technology-med iated conditions, we provide empirical support for three hypotheses on the determinants of electronic integration. Implications and research extensions are identified to guide further research in this important area.