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Examining Complementary Effects of IT Investment on Firm Profitability: Are Complementarities the Missing Link?
Journal article   Peer reviewed

Examining Complementary Effects of IT Investment on Firm Profitability: Are Complementarities the Missing Link?

Johnny Jiung-Yee Lee, Taylor Randall, Paul Jen-Hwa Hu and Anne Wu
Information systems management, v 31(4), pp 340-352
02 Oct 2014

Abstract

firm profitability IT business value IT investment
Prior research has documented that IT investment increases market returns. Economic theories predict such returns to be recognized in accounting profitability; this relationship remains ambiguous in prior literature. We reexamine the relationship between IT investment and firm profitability. Our approach is unique in that we examine complementarities between distinct IT components. We document that a firm's investments in IT components exhibit different impacts on its profitability conditional on the level of investments in complementary components.

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12 citations in Scopus

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UN Sustainable Development Goals (SDGs)

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#9 Industry, Innovation and Infrastructure

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Collaboration types
Domestic collaboration
International collaboration
Web of Science research areas
Computer Science, Information Systems
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