Lorin M. Hitt

Lorin M. Hitt
  • Zhang Jindong Professor
  • Professor of Operations, Information and Decisions

Contact Information

  • office Address:

    3730 Walnut Street
    571 Jon M. Huntsman Hall
    Philadelphia, PA 19104

Research Interests: applied econometrics, economics of electronic commerce, information systems and organization, information technology and productivity, intangible assets

Links: CV, Personal Website

Overview

I am currently the Zhang Jindong Professor of Operations, Information and Decisions at the University of Pennsylvania, Wharton School.  My central research area is on the relationship between information technology and productivity and the factors that affect the value of IT investments. Most of my recent work has been the study of complementary factors, such as organizational design and human capital, on the value of IT. Most of this work is directed at firms in all industries, although I have become increasingly interested in IT deployment in healthcare. In recent years, we have been more extensively working on the role of the IT workforce and issues that affect the demand and wages of IT workers (such as offshoring and the H1-B visa program). I have also been extensively involved in electronic business research investigating the the nature of competition in electronic markets (such as on-line travel agents), the value proposition for alternative delivery systems (such as online retail banking), the role of switching costs in determining pricing and product strategy (as in online discount brokerage), and the effect of recommender systems on consumer behavior.

I teach undergraduate and graduate courses in information systems management and economics and data analysis.  I also teach the undergraduate core class in OPIM in the Fall (off-season).

In my spare time, I also consult and conduct research into the design of IT outsourcing agreements, methods for evaluating IT investments, and other questions at the intersection of information systems, economics and econometrics. I also occasionally serve as an expert witness for information technology and consumer-related litigation (intellectual property, consumer behavior in computers and consumer electronics industries, enterprise software, and software project problems).

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Research

My current research focuses on the economics of IT labor mobility, contracting in enteprise software, the influence of recommender systems on consumer behavior, measuring intangible assets, and  pricing information goods.  See my personal site for more information.

  • Lynn Wu, Lorin M. Hitt, Bowen Lou (2018), Data Analytics Skills, Innovation and Firm Productivity, Management Science, Forthcoming.

    Abstract: We examine the relationship between data analytics capabilities and innovation using detailed firm-level data. To measure innovation, we first utilize a survey to capture two types of innovation practices, process improvement and new technology development for 331 firms. We then use patent data to further analyze new technology development for a broader sample of more than 2,000 publicly-traded firms. We find that data analytics capabilities are more likely to be present and are more valuable in firms that are oriented around process improvement and that create new technologies by combining a diverse set of existing technologies than they are in firms that are focused on generating entirely new technologies. These results are consistent with the theory that data analytics are complementary to certain types of innovation because they enable firms to expand the search space of existing knowledge to combine into new technologies, as well as prior theoretical arguments that data analytics support incremental process improvements. Data analytics appear less effective for developing entirely new technologies or creating combinations involving a few areas of knowledge, innovative approaches where there is either limited data or limited value in integrating diverse knowledge. Overall, our results suggest firms that have historically focused in specific types of innovation—process innovation and innovation by diverse recombination—may become the leading investors in data analytics and receive the most benefits from it.

  • Lynn Wu, Bowen Lou, Lorin M. Hitt (Under Revision), Data Analytics Supports Decentralized Innovation Communities.

    Abstract: We examine the relationship between data analytics and innovation, focusing on how the benefits of analytics may differ depending on how firms organize their innovative activities. Our analysis draws on prior work that has measured firm analytics capability using detailed employee-level data and matches these data to metrics on innovation structure that are constructed by analyzing intra-firm inventor networks. We apply community detection algorithms to these inventor networks to determine whether a firm has a centralized or decentralized innovation structure. In a panel of large firms from the years 1988 to 2013, we find that firms with a decentralized innovation structure have a greater demand for analytics skills and receive greater productivity benefits from their analytics capabilities, consistent with a complementarity between analytics and decentralized innovation. Furthermore, we find the complementarity is strongest for innovation involving the recombination of existing technologies. This suggests that data analytics can alleviate a weakness in decentralized innovation structures by allowing firms to search for knowledge broadly and link distant ideas to create new ones, an advantage previously available primarily to centralized innovation.

  • Lynn Wu, Lorin M. Hitt, Fujie Jin (2017), Are All Spillovers Created Equal? A Network Perspective on IT Labor Movements, Management Science, 64 (7).

  • Lorin M. Hitt, Ruben Lobel, Ozge Yapar (Work In Progress), Technology sharing in two-sided markets.

    Abstract: This paper investigates the drivers behind Tesla's decision to make its patents freely available to other electric car manufacturers. The two sides of this market, car owners and potential charging stations, rely on each other to increase the value of their investment. We show under what conditions subsidizing the competitors can be profitable. By sharing technology, Tesla may be able improve the charging station network and increase it's own profit from car sales.

  • Lorin M. Hitt, Fujie Jin, Lynn Wu (Under Revision), Data Skills and Corporate Value of Social Media.

  • Prasanna Tambe (OPIM) and Lorin M. Hitt (2011), Now IT’s Personal: Offshoring and the Shifting Skill Composition of the US Information Technology Workforce, Management Science, (forthcoming).

  • XinXin Li (OPIM), Lorin M. Hitt, Z. John Zhang (MKTG) (2011), Product Reviews and Competition in Markets for Repeat Purchase Products, Journal of Management Information Systems, (forthcoming).

  • Prasanna Tambe (OPIM), Lorin M. Hitt, Erik Brynjolfsson (2011), The Extroverted Firm: How External Information Practices Affect Productivity, Management Science, (forthcoming).

  • Lorin M. Hitt, Mei Xue, Pei-Yu Chen (2011), The Determinants and Outcomes of Internet Banking Adoption, Management Science, 57(2): 291-307.

  • XinXin Li and Lorin M. Hitt (2010), Price Effects in Online Product Reviews: An Analystical Model and Empirical Analysis, MIS Quarterly, 34(4): 809-831.

Teaching

I teach four courses:

OPIM101 – Introduction to OPIM (Fall only)

OPIM105 – Data Analysis in VBA and SQL (next offering Fall, 2015)

OPIM469 – Information Strategy and Economics (next offering unknown – maybe Fall, 2016)

OPIM955 – Doctoral Seminar in IS Economics (offered Spring, 2015)

Current Courses

  • OIDD105 - Developing Tools For Data Access And Analysis (vba And Sql Programming)

    This course provides an introduction to the construction of data analysis tools that are commonly used for business applications, especially in consulting and finance. The course builds on the spreadsheet and analytical skills developed in OPIM101, providing a much more extensive treatment of spreadsheet application development and database management. The first portion of the course will focus on programming in VBA, the embedded programming language in the Microsoft Office suite of applications. This will be supplemented with discussion of industry best practice in software development, such as specification development, interface design, documentation, and testing. The second portion of the class will emphasize data access and analysis utilizing SQL, the industry standard language for interacting with database software.

    OIDD105001 ( Syllabus )

    OIDD105002 ( Syllabus )

Past Courses

  • OIDD105 - Developing Tools for Data Access and Analysis (VBA and SQL Programming)

    This course provides an introduction to the construction of data analysis tools that are commonly used for business applications, especially in consulting and finance. The course builds on the spreadsheet and analytical skills developed in OPIM101, providing a much more extensive treatment of spreadsheet application development and database management. The first portion of the course will focus on programming in VBA, the embedded programming language in the Microsoft Office suite of applications. This will be supplemented with discussion of industry best practice in software development, such as specification development, interface design, documentation, and testing. The second portion of the class will emphasize data access and analysis utilizing SQL, the industry standard language for interacting with database software.

  • OIDD955 - Research Seminar in Information Systems

    This course provides an overview of some of the key Information Systems literature from the perspective of Insormation Strategy and Economics (ISE) and Information Decision Technologies (IDT). This course is intended to provide an introduction for first year OIDD doctoral students, as well as other Wharton doctoral students, to important core research topics and methods in ISE and IDT in order for students to do research in the field of Information Systems. While it is intended as a "first course" for OPIM doctoral students in ISE and IDT, it may also be useful for students who are engaged in research or plan to perform information technology related research in other disciplines.

Awards and Honors

  • Best Paper Runner-up – Management Science, 2014
  • Best Paper – Information Systems Research, 2013
  • Wharton Excellence in Teaching Award, Undergraduate Division, 2011
  • Wharton Excellence in Teaching Award, Undergraduate Division, 2007-2008
  • Runner-up for Best Paper, International Conference on Information Systems, 2004
  • Wharton Excellence in Teaching Award, Undergraduate Division, 2003
  • Wharton Undergraduate Excellence in Teaching, 1999
  • David Hauck Award for Distinguished Teaching, 1999
  • Runner-up for Best Paper, International Conference on Information Systems, 1999
  • National Science Foundation Career Grant Recipient, 1998
  • Lindback Award for Distinguished Teaching, 1998
  • Wharton Undergraduate Excellence in Teaching, 1998
  • Wharton Excellence in Teaching Award, Undergraduate Division, 1998-2001

In the News

Knowledge @ Wharton

Activity

In the News

How a Twitter Audience of One Can Drive Business

Twitter is like a megaphone, but business should see it more like a telephone, according to this opinion piece.

Knowledge @ Wharton - 2018/08/9
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Awards and Honors

Best Paper Runner-up – Management Science 2014
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