A Principal-Agent Perspective on ERP Implementation Decisions - An Empirical Analysis Based on Chinese Listed Companies

Posted: 20 Jul 2007 Last revised: 25 Jun 2010

See all articles by Jidong Zhang

Jidong Zhang

Winona State University

Liyan Wang

Peking University - Guanghua School of Management

Qing Liao

Ball State University

Longhua Yang

affiliation not provided to SSRN

Date Written: November 6, 2008

Abstract

This study attempt to find the motivation of ERP implementation based on the principal-agent theory. From the view of information resource sharing and communication, which is a critical characteristic of ERP, this paper investigates whether the decision of ERP implementation is affected by the principal-agent mechanism.

We applied univariate analysis with matched sample and multivariate analysis with logistic regression to our study. Our findings reveal that Chinese companies try to resolve information asymmetry problems from principal-agent mechanism by implementing ERP. ERP adopters have lower shareholding proportion of managers and higher distance between concentration of ownership and managerial ownership than ERP non-adopters.

Our study contributes to the ERP research literatures and information system research. Our study provides a new perspective on the information system research.

Keywords: ERP, principal-agent, ERP implementation

JEL Classification: M40, M41, M46, M47, D82, G34

Suggested Citation

Zhang, Jidong and Wang, Liyan and Liao, Qing and Yang, Longhua, A Principal-Agent Perspective on ERP Implementation Decisions - An Empirical Analysis Based on Chinese Listed Companies (November 6, 2008). Available at SSRN: https://ssrn.com/abstract=1001850

Jidong Zhang (Contact Author)

Winona State University ( email )

Winona, MN 55987
United States

Liyan Wang

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Qing Liao

Ball State University ( email )

Muncie, IN 47306-0340
United States

Longhua Yang

affiliation not provided to SSRN ( email )

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