Information technology and firm performance: An integrative model of the role of complementarities
Postulating a positive impact of information technology (IT) on firm performance has had theoretical appeal for decades (Leavitt and Whisler, 1958). Empirical research has well documented this relationship (Barua and Mukhopadhyay, 2000; Brynjolfsson and Hitt, 2000; Chan, 2000; Dedrick et al., 2003; Dehning and Richardson, 2002; Kohli and Davaraj, 2003; Melville et al., 2004) after having overcome the problems that initially led to the so-called ‘computer productivity paradox’ (Baily, 1986; Brynjolfsson and Yang, 1996; Roach, 1987). However, empirical research suggests that firms differ significantly in their ability to realize performance gains from IT (Brynjolfsson and Hitt, 1995; Loveman, 1994). Further, IT's performance impact was found to increase with longer measurement periods (Brynjolfsson and Hitt, 2003), and the stock market valuations of IT have been found to be high compared to other capital types (Brynjolfsson et al., 2002). These findings have been explained by factors complementary to IT that differ from firm to firm, change slowly, and remain invisible in the investment statistics but appear in the stock market valuations of firms (Brynjolfsson and Hitt, 1998a). Thus, the extent of IT’s performance impact has been supposed to depend on a variety of IT complements (Brynjolfsson and Hitt, 2000; Melville et al., 2004).
KeywordsInformation Technology Firm Performance Human Resource Management Power Distribution Organization Design
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