IT Knowledge Spillovers, Absorptive Capacity, and Productivity: Evidence from Enterprise Software

62 Pages Posted: 3 Apr 2013 Last revised: 28 Nov 2016

Peng Huang

University of Maryland - Robert H. Smith School of Business

Marco Ceccagnoli

Scheller College of Business at Georgia Tech

Chris Forman

Cornell University - Dyson School of Applied Economics and Management; Georgia Institute of Technology - Scheller College of Business

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business

Date Written: April 2, 2013

Abstract

We examine the productivity implications of external knowledge flows obtained through an Internet-enabled discussion forum in which IT professionals help one another solve problems related to the implementation and use of enterprise software. Consistent with the absorptive capacity framework (Cohen and Levinthal 1989, 1990), we show that IT spillovers are more likely to accrue to firms with prior related investments in advanced enterprise software and less likely to accrue when the external knowledge is more difficult to learn, such as for business functional knowledge or knowledge originating from relatively newer and emerging discussion forums. We also show that when knowledge is difficult to learn, the ability to derive the value of IT spillovers is more dependent on prior related IT investments. As with R&D investments, the dual role of IT investments has important implications for estimating their “true” rate of return.

Keywords: Information systems, IT knowledge spillovers, Productivity, Enterprise software, online community networks

Suggested Citation

Huang, Peng and Ceccagnoli, Marco and Forman, Chris and Wu, D. J., IT Knowledge Spillovers, Absorptive Capacity, and Productivity: Evidence from Enterprise Software (April 2, 2013). Available at SSRN: https://ssrn.com/abstract=2243886 or http://dx.doi.org/10.2139/ssrn.2243886

Peng Huang (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Marco Ceccagnoli

Scheller College of Business at Georgia Tech ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Chris Forman

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

D. J. Wu

Georgia Institute of Technology - Ernest Scheller Jr. College of Business ( email )

800 West Peachtree Street, NW
Atlanta, GA 30308
United States
404-894-4364 (Phone)
404-894-6030 (Fax)

HOME PAGE: http://mgt.gatech.edu/wu

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