IT Investments and Financial Performance, a Review: The Bankruptcy Perspective

42 Pages Posted: 13 Dec 2019

See all articles by Carlos Piñeiro-Sánchez

Carlos Piñeiro-Sánchez

University of Coruña - Dept. of Financial Economics & Accountability. Financial Management & Information Systems Research Group (fysig)

Pablo de Llano Monelos

University of Coruña

Manuel Rodríguez - López

University of Coruña - Finance and MIS Research Group (fysig)

Date Written: July 4, 2017

Abstract

This study examines whether IT resources and capabilities affect the risk of bankruptcy of SMEs. Drawing on previous literature on bankruptcy and the resource-based view of the firm (RBV), we offer conclusive evidence of the influence of IT resources on financial health, as measured by the odds of filing for bankruptcy within a certain period of time. Flexibility, Internet-related abilities, cooperation/networking, and management skills are consistent with huge reductions in the risk of bankruptcy, implying that they are high value resources. Our results also stress that companies should pay attention to the development of bundles of complementary IT assets and capabilities, to create synergies and leverage IT resources. From a methodological point of view, we reveal new links between organization literature and previous research on bankruptcy; our innovative measure of performance can be a valuable tool for future research in both fields.

Keywords: IT, RBV, bankruptcy

JEL Classification: M15, G33

Suggested Citation

Piñeiro-Sánchez, Carlos and de Llano-Monelos, Pablo and Rodríguez - López, Manuel, IT Investments and Financial Performance, a Review: The Bankruptcy Perspective (July 4, 2017). Available at SSRN: https://ssrn.com/abstract=3493743 or http://dx.doi.org/10.2139/ssrn.3493743

Carlos Piñeiro-Sánchez (Contact Author)

University of Coruña - Dept. of Financial Economics & Accountability. Financial Management & Information Systems Research Group (fysig) ( email )

Campus de Elviña
A Coruña, A Coruña E15071
Spain

HOME PAGE: http://www.udc.es/grupos/fysig/carlos

Pablo De Llano-Monelos

University of Coruña ( email )

Campus Elviña s/n
Coruña, Galicia 15071
Spain

Manuel Rodríguez - López

University of Coruña - Finance and MIS Research Group (fysig) ( email )

Campus de Elviña
http://www.udc.es/grupos/fysig
A Coruña, A Coruña E15071
Spain

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