IT Innovation Persistence and Financial Performance
28 Pages Posted: 15 Jan 2008
Date Written: January 11, 2008
Prior studies have shown that the IT innovation capability, a company's ability to systematically innovate with IT, is not easily replicated (persistent), and the persistence tends to be stronger during periods when the IT budgets are declining (hard IT budgets), such the post Y2K period. Building on resource based view we argue that companies that systematically innovate with IT have a sustained competitive advantage versus their competitors who are adopting an opportunistic approach to IT innovation or choose not to innovate with IT, and the advantage is stronger during periods of hard IT budgets. Both or these arguments were strongly supported when tested on a sample of 1057 large US firms.
Keywords: IT Innovation Capability, Firm Performance, Competitive Advantage
JEL Classification: L86, M40
Suggested Citation: Suggested Citation