{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,3,16]],"date-time":"2026-03-16T21:27:24Z","timestamp":1773696444021,"version":"3.50.1"},"reference-count":106,"publisher":"Institute for Operations Research and the Management Sciences (INFORMS)","issue":"9","content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":["Management Science"],"published-print":{"date-parts":[[2025,9]]},"abstract":"<jats:p> We examine how dimensions of information technology (IT) strategy affect the performance of young businesses, as well as dynamics as they age. Drawing from lifecycle theory and firm boundary research, we derive the relationship between age-based performance differences and IT sourcing decisions. We highlight the dynamic tension between outsourcing\u2019s support for accessing frontier inputs in the short term and ownership\u2019s advantages for developing organization-specific resources and capabilities over time. Leveraging a large panel of Census Bureau microdata from 2006 to 2014, we provide the first systematic evidence that young manufacturing establishments (both startups and new units of existing firms) disproportionately benefit from modern IT outsourcing (ITO). The young also enjoy productivity benefits from owned IT capital (ITK), despite high uncertainty, smaller operational scale, and less complementary organizational capital. Although these returns appear commensurate with those of older producers, they are conditional on survival, which is improved by ITO but harmed by ITK accumulation. Combining flexibility-related gains from ITK with vintage-related advantages in early ITK investment, the young are revealed to have significantly greater IT productivity than older incumbents. A large battery of tests supports a causal interpretation, as well as mechanisms rooted in mitigating the effects of uncertainty (as opposed to size- or cost-related reasons). These findings illuminate an often-overlooked pattern of young-business dynamism relevant to economic trends and management practices in an increasingly digital age. <\/jats:p><jats:p> This paper was accepted by DJ Wu, information systems. <\/jats:p><jats:p> Funding: This work was supported by the Social Sciences and Humanities Research Council (SSHRC) of Canada, the National Bureau of Economic Research, and the Stanford Digital Economy Lab. <\/jats:p><jats:p> Supplemental Material: The online appendix is available at https:\/\/doi.org\/10.1287\/mnsc.2019.03116 . <\/jats:p>","DOI":"10.1287\/mnsc.2019.03116","type":"journal-article","created":{"date-parts":[[2024,12,20]],"date-time":"2024-12-20T09:16:07Z","timestamp":1734686167000},"page":"7449-7473","source":"Crossref","is-referenced-by-count":6,"title":["Economies Before Scale: I.T. Strategy and Performance Dynamics of Young U.S. Businesses"],"prefix":"10.1287","volume":"71","author":[{"ORCID":"https:\/\/orcid.org\/0000-0003-4813-2507","authenticated-orcid":false,"given":"Wang","family":"Jin","sequence":"first","affiliation":[{"name":"Stanford Digital Economy Laboratory, Stanford University, Stanford, California 94305"}]},{"ORCID":"https:\/\/orcid.org\/0000-0003-0844-4901","authenticated-orcid":false,"given":"Kristina","family":"McElheran","sequence":"additional","affiliation":[{"name":"University of Toronto Scarborough and Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada"}]}],"member":"109","reference":[{"key":"B1","doi-asserted-by":"publisher","DOI":"10.1086\/209816"},{"key":"B2","doi-asserted-by":"publisher","DOI":"10.1257\/aer.20130470"},{"key":"B3","doi-asserted-by":"publisher","DOI":"10.3982\/ECTA13408"},{"key":"B4","doi-asserted-by":"publisher","DOI":"10.2307\/2109796"},{"key":"B5","doi-asserted-by":"publisher","DOI":"10.1515\/9781400829828"},{"key":"B6","doi-asserted-by":"publisher","DOI":"10.1016\/0165-4101(92)90018-W"},{"key":"B8","doi-asserted-by":"publisher","DOI":"10.2307\/2297968"},{"key":"B9","doi-asserted-by":"publisher","DOI":"10.1126\/science.247.4945.920"},{"key":"B10","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2020.3693"},{"key":"B11","doi-asserted-by":"publisher","DOI":"10.1111\/jofi.12362"},{"key":"B12","doi-asserted-by":"publisher","DOI":"10.1093\/qje\/qjaa004"},{"key":"B13","doi-asserted-by":"publisher","DOI":"10.1002\/smj.4250070405"},{"key":"B14","doi-asserted-by":"publisher","DOI":"10.1287\/isre.2022.1170"},{"key":"B15","doi-asserted-by":"publisher","DOI":"10.1177\/014920639101700108"},{"key":"B16","doi-asserted-by":"publisher","DOI":"10.1016\/j.jeconom.2021.12.003"},{"key":"B17","doi-asserted-by":"publisher","DOI":"10.1086\/708936"},{"key":"B18","doi-asserted-by":"publisher","DOI":"10.2307\/3250983"},{"key":"B19","author":"Bloom N","year":"2018","journal-title":"Harvard Bus. Rev."},{"key":"B20","doi-asserted-by":"publisher","DOI":"10.1257\/aer.102.1.167"},{"key":"B21","doi-asserted-by":"publisher","DOI":"10.3982\/ECTA10927"},{"key":"B24","doi-asserted-by":"publisher","DOI":"10.1257\/aer.20170491"},{"key":"B25","doi-asserted-by":"publisher","DOI":"10.1080\/07474930008800475"},{"key":"B26","doi-asserted-by":"publisher","DOI":"10.1007\/s11146-017-9643-y"},{"key":"B28","doi-asserted-by":"publisher","DOI":"10.1162\/003355302753399526"},{"key":"B29","doi-asserted-by":"publisher","DOI":"10.1080\/10438599500000002"},{"key":"B30","doi-asserted-by":"publisher","DOI":"10.1257\/jep.14.4.23"},{"key":"B31","doi-asserted-by":"publisher","DOI":"10.1162\/003465303772815736"},{"key":"B32","doi-asserted-by":"publisher","DOI":"10.1145\/1735223.1735234"},{"key":"B33","doi-asserted-by":"publisher","DOI":"10.1057\/s11369-021-00224-5"},{"key":"B34","doi-asserted-by":"publisher","DOI":"10.1257\/mac.20180386"},{"key":"B235","doi-asserted-by":"crossref","unstructured":"Caldarola B, Fontanelli L (2024) Cloud technologies, firm growth, and industry concentration: Evidence from France. Preprint, submitted September 25, https:\/\/arxiv.org\/abs\/2409.17035.","DOI":"10.2139\/ssrn.4965791"},{"key":"B35","volume-title":"Declining Business Dynamism: Structural and Policy Determinants","author":"Calvino F","year":"2020"},{"key":"B36","author":"Camuffo A","year":"2022","journal-title":"Strategic Management J."},{"key":"B37","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2018.3249"},{"key":"B38","doi-asserted-by":"publisher","DOI":"10.2307\/41703497"},{"key":"B39","doi-asserted-by":"publisher","DOI":"10.25300\/MISQ\/2017\/41.3.13"},{"key":"B40","doi-asserted-by":"publisher","DOI":"10.1086\/261795"},{"key":"B41","doi-asserted-by":"publisher","DOI":"10.1145\/1721654.1721667"},{"key":"B42","doi-asserted-by":"publisher","DOI":"10.1093\/rfs\/hhu035"},{"key":"B43","doi-asserted-by":"publisher","DOI":"10.1257\/jep.28.3.3"},{"key":"B44","doi-asserted-by":"publisher","DOI":"10.1257\/aer.p20171020"},{"key":"B45","doi-asserted-by":"publisher","DOI":"10.1145\/641865.641866"},{"key":"B46","doi-asserted-by":"publisher","DOI":"10.1162\/rest_a_01393"},{"key":"B47","doi-asserted-by":"publisher","DOI":"10.2308\/accr-10130"},{"key":"B48","doi-asserted-by":"publisher","DOI":"10.2307\/2937862"},{"key":"B49","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2018.03.001"},{"key":"B50","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2019.01586"},{"key":"B51","doi-asserted-by":"publisher","DOI":"10.1016\/j.jue.2005.05.004"},{"key":"B52","doi-asserted-by":"publisher","DOI":"10.1111\/j.1530-9134.2008.00179.x"},{"key":"B53","doi-asserted-by":"publisher","DOI":"10.1257\/aer.102.1.556"},{"key":"B54","doi-asserted-by":"publisher","DOI":"10.1111\/ecca.12172"},{"key":"B56","doi-asserted-by":"publisher","DOI":"10.1002\/smj.3010"},{"key":"B57","volume-title":"Alternative Capital Asset Depreciation Rates for U.S. Capital and Multifactor Productivity Measures","author":"Giandrea MD","year":"2021"},{"issue":"367","key":"B58","first-page":"630","volume":"92","author":"Gort M","year":"1982","journal-title":"Econom. J."},{"key":"B59","doi-asserted-by":"publisher","DOI":"10.2307\/1912791"},{"key":"B60","doi-asserted-by":"publisher","DOI":"10.1002\/smj.4250171110"},{"key":"B61","doi-asserted-by":"publisher","DOI":"10.1016\/0304-4076(86)90058-8"},{"key":"B62","doi-asserted-by":"publisher","DOI":"10.1257\/pol.20170498"},{"key":"B63","doi-asserted-by":"publisher","DOI":"10.1162\/REST_a_00288"},{"key":"B64","doi-asserted-by":"publisher","DOI":"10.1177\/1476127003001001218"},{"key":"B65","doi-asserted-by":"publisher","DOI":"10.25300\/MISQ\/2013\/37.1.14"},{"key":"B66","doi-asserted-by":"publisher","DOI":"10.1287\/isre.1100.0290"},{"key":"B67","doi-asserted-by":"publisher","DOI":"10.1111\/poms.12609"},{"key":"B68","doi-asserted-by":"publisher","DOI":"10.1016\/j.jcorpfin.2017.12.003"},{"key":"B69","doi-asserted-by":"publisher","DOI":"10.1002\/smj.332"},{"key":"B71","doi-asserted-by":"publisher","DOI":"10.1162\/00346530151143851"},{"key":"B72","doi-asserted-by":"publisher","DOI":"10.2307\/1912606"},{"key":"B73","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2008.12.003"},{"key":"B74","doi-asserted-by":"publisher","DOI":"10.1257\/jep.28.3.25"},{"key":"B77","doi-asserted-by":"publisher","DOI":"10.1287\/orsc.3.3.383"},{"key":"B80","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2015.2165"},{"key":"B81","doi-asserted-by":"publisher","DOI":"10.1257\/aer.20220522"},{"key":"B82","doi-asserted-by":"publisher","DOI":"10.1108\/eb028979"},{"key":"B83","doi-asserted-by":"publisher","DOI":"10.2307\/30036537"},{"key":"B84","doi-asserted-by":"publisher","DOI":"10.1111\/1467-937X.00246"},{"key":"B85","doi-asserted-by":"publisher","DOI":"10.2307\/249630"},{"key":"B86","doi-asserted-by":"publisher","DOI":"10.1287\/orsc.1050.0125"},{"key":"B87","doi-asserted-by":"publisher","DOI":"10.5465\/amj.2006.22798175"},{"key":"B88","doi-asserted-by":"publisher","DOI":"10.1111\/jems.12054"},{"key":"B89","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2014.2020"},{"key":"B91","doi-asserted-by":"publisher","DOI":"10.2307\/25148636"},{"key":"B92","doi-asserted-by":"publisher","DOI":"10.25300\/MISQ\/2013\/37.2.09"},{"key":"B93","doi-asserted-by":"publisher","DOI":"10.1287\/orsc.1040.0093"},{"key":"B94","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1080.0922"},{"key":"B95","doi-asserted-by":"publisher","DOI":"10.2307\/2171831"},{"key":"B97","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.37.7.787"},{"key":"B98","doi-asserted-by":"publisher","DOI":"10.1002\/(SICI)1097-0266(199809)19:9<853::AID-SMJ977>3.0.CO;2-B"},{"key":"B99","volume-title":"Competitive Strategy: Techniques for Analyzing Industries and Competitors","author":"Porter ME","year":"1980"},{"issue":"4","key":"B100","first-page":"43","volume":"35","author":"Quinn JB","year":"1994","journal-title":"MIT Sloan Management Rev."},{"key":"B101","doi-asserted-by":"publisher","DOI":"10.25300\/MISQ\/2016\/40.1.04"},{"issue":"1","key":"B102","first-page":"255","volume":"67","author":"Spence AM","year":"1977","journal-title":"Amer. Econom. Rev."},{"key":"B103","doi-asserted-by":"publisher","DOI":"10.2307\/3003316"},{"key":"B104","doi-asserted-by":"publisher","DOI":"10.2307\/3003508"},{"key":"B106","doi-asserted-by":"publisher","DOI":"10.2307\/25148647"},{"key":"B107","volume-title":"Internet Computing","author":"Sunyaev A","year":"2020"},{"key":"B108","doi-asserted-by":"crossref","unstructured":"Susarla A, Barua A (2011) Contracting efficiency and new firm survival in markets enabled by information technology. Inform. Systems Res. 22(2):306\u2013324.","DOI":"10.1287\/isre.1090.0251"},{"key":"B109","doi-asserted-by":"publisher","DOI":"10.1257\/jel.49.2.326"},{"key":"B210","doi-asserted-by":"crossref","unstructured":"Tambe P (2014) Big data investment, skills, and firm value. Management Sci. 60(6):1452\u20131469.","DOI":"10.1287\/mnsc.2014.1899"},{"key":"B110","doi-asserted-by":"publisher","DOI":"10.1287\/isre.1110.0398"},{"key":"B111","doi-asserted-by":"crossref","unstructured":"Tambe P, Hitt L, Rock D, Brynjolfsson E (2020) Digital capital and superstar firms. NBER Working Paper No. 28285, National Bureau of Economic Research, Cambridge, MA.","DOI":"10.3386\/w28285"},{"key":"B213","unstructured":"Van Reenen J, Bloom N, Brynjolfsson E, Saporta-Eksten I, Foster L, Patnaik M, Jarmin R (2014) IT and Management in America (No. 9886). CEPR Discussion papers, Centre for Economic Policy Research, London."},{"key":"B113","doi-asserted-by":"publisher","DOI":"10.1002\/smj.4250050207"},{"key":"B114","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.31.8.928"},{"key":"B115","volume-title":"The New IT Outsourcing Landscape: From Innovation to Cloud Services","author":"Willcocks LP","year":"2016"},{"key":"B116","volume-title":"Transaction Cost Economics. Handbook of Industrial Organization","author":"Williamson OE","year":"1989"},{"key":"B117","doi-asserted-by":"publisher","DOI":"10.2307\/2393356"}],"container-title":["Management Science"],"original-title":[],"language":"en","link":[{"URL":"https:\/\/pubsonline.informs.org\/doi\/pdf\/10.1287\/mnsc.2019.03116","content-type":"unspecified","content-version":"vor","intended-application":"similarity-checking"}],"deposited":{"date-parts":[[2025,9,19]],"date-time":"2025-09-19T08:24:23Z","timestamp":1758270263000},"score":1,"resource":{"primary":{"URL":"https:\/\/pubsonline.informs.org\/doi\/10.1287\/mnsc.2019.03116"}},"subtitle":[],"short-title":[],"issued":{"date-parts":[[2025,9]]},"references-count":106,"journal-issue":{"issue":"9","published-print":{"date-parts":[[2025,9]]}},"alternative-id":["10.1287\/mnsc.2019.03116"],"URL":"https:\/\/doi.org\/10.1287\/mnsc.2019.03116","relation":{},"ISSN":["0025-1909","1526-5501"],"issn-type":[{"value":"0025-1909","type":"print"},{"value":"1526-5501","type":"electronic"}],"subject":[],"published":{"date-parts":[[2025,9]]}}}