ISSUES IN LINKING INFORMATION TECHNOLOGY CAPABILITY TO FIRM PERFORMANCE.

Author List: Santhanam, Radhika; Hartono, Edward;
MIS Quarterly, 2003, Volume 27, Issue 1, Page 125-165.
The resource-based view has been proposed to investigate the impact of information technology (IT) investments on firm performance. Researchers have shown that a firm's ability to effectively leverage its IT investments by developing a strong IT capability can result in improved firm performance. We test the robustness of this approach and examine several related issues. Our results indicate that firms with superior IT capability indeed exhibit superior current and sustained firm performance when compared to average industry performance, even after adjusting for effects of prior firm performance. However, the differences in the results from various analyses suggest that the impact of "halo effects" and prior financial performance of firms must be taken into consideration in future tests of IT capability. Further, it is critical to develop theoretically derived multidimensional measures of IT capability in order to continue to apply the RBV approach to assess the impact of IT investments on firm performance.
Keywords: firm performance; IT capability; Resource-based view
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#59 0.314 capabilities capability firm firms performance resources business information technology firm's resource-based competitive it-enabled view study value infrastructure results organizational model
#93 0.236 performance results study impact research influence effects data higher efficiency effect significantly findings impacts empirical significant suggest outcomes better positive
#106 0.127 integration present offer processes integrating current discuss perspectives related quality literature integrated benefits measures potential regarding issues finally taken propose
#51 0.111 results study research experiment experiments influence implications conducted laboratory field different indicate impact effectiveness future participants evidence test controlled involving
#271 0.092 technology investments investment information firm firms profitability value performance impact data higher evidence diversification industry payoff return findings decisions greater