Convergence of Firm-Level Productivity, Globalisation, Information Technology, and Competition: Evidence from France

Information technology (IT) skill shortages appear at the market level occasionally—usually for emerging technologies, unanticipated challenges, and/or unresolved issues such as systems security. Even when a market-level skill shortage does not exist, a firm can still suffer from skill shortages for its critical information system (IS) project and/or IT operations unless the firm plans and manages its needs for IT skills. This chapter first surveys IT skills at the market level and then at the firm level to gain a perspective on the issues. Attention turns to the nature and characteristics of skills in general—not just IT skills—by reviewing past literature. The management of skills is deeply rooted in the management of knowledge, skills, and abilities (KSAs) and human resource practices of the firm. Key issues and lessons are drawn from the literature in those areas. We conclude by considering the nature and characteristics of IT skills in developing an agenda for the effective management of IT skills.

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Assessing the Value of Information Technology Investment to Firm Performance

Advances in Information Resources Management - Advanced Topics in Information Resources Management, Volume 1 ◽

10.4018/978-1-930708-44-0.ch015 ◽

2002 ◽

pp. 257-278

Author(s):

Qing Hu ◽

Robert T. Plant

Keyword(s):

Information Technology ◽

Firm Performance ◽

Financial Performance ◽

Capital Investment ◽

Large Scale ◽

Performance Data ◽

It Investment ◽

Firm Level ◽

It Investments ◽

And Performance

The promise of increased competitive advantage has been the driving force behind the large-scale investment in information technology (IT) over the last three decades. There is a continuing debate among executives and academics as to the measurable benefits of this investment. The return on investment (ROI) and other performance measures reported in the academic literature indicate conflicting empirical findings. Many previous studies have based their conclusions on the statistical correlation between IT capital investment and firm performance data of the same time period. In this study we argue that the causal relationship between IT investment and firm performance could not be reliably established through concurrent IT and performance data. We further submit that it would be more convincing to infer causality if the IT investments in the preceding years are significantly correlated with the performance of a firm in the subsequent year. Using the Granger causality models and three samples of firm-level financial data, we found no statistical evidence that IT investments have caused the improvement of financial performance of the firms in the samples. On the contrary, the causal models suggest that improved financial performance over consecutive years may have contributed to the increase of IT investment in the subsequent year. Implications of these findings as well as directions for future studies are discussed.

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Investigating the influence of information technology capability on risk and returns: a firm-level empirical analysis

International Journal of Business Excellence ◽

10.1504/ijbex.2017.085797 ◽

2017 ◽

Vol 13 (1) ◽

pp. 112

Author(s):

Bharat Arora ◽

Zillur Rahman

Keyword(s):

Information Technology ◽

Empirical Analysis ◽

Firm Level ◽

Technology Capability ◽

Information Technology Capability

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The Return on Information Technology: Who Benefits Most?

Information Systems Research ◽

10.1287/isre.2020.0960 ◽

2020 ◽

Author(s):

Emmanuel Dhyne ◽

Jozef Konings ◽

Jeroen Van den bosch ◽

Stijn Vanormelingen

Keyword(s):

Information Technology ◽

Panel Data ◽

Information And Communication Technology ◽

Communication Technology ◽

Value Added ◽

Marginal Product ◽

Aggregate Level ◽

Firm Level ◽

Information And Communication ◽

Business To Business

Information and communication technology (ICT) has continuously reshaped the way in which businesses operate. Yet opinions among economists about the returns to ICT, especially at the aggregate level, are divided. We exploit business-to-business transaction panel data from ICT producers to construct ICT capital stocks for a large sample of Belgian firms. This allows us to estimate the returns to ICT at the firm level and to investigate how firm-level ICT investments affected aggregate gross domestic product and productivity. We find large returns to ICT—more precisely, a firm investing an additional euro in ICT—increases value added by 1 euro and 35 cents on average. This marginal product of ICT investment increases with firm size and varies across sectors. Although we find substantial returns to ICT at the firm level, returns are much lower at the aggregate level. This is due to underinvestment in ICT (ICT capital deepening is low) and because firms with especially high returns are underinvesting.

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The Relevance of Information Technology Expenditures

Journal of Information Systems ◽

10.2308/jis.2010.24.2.39 ◽

2010 ◽

Vol 24 (2) ◽

pp. 39-77 ◽

Cited By ~ 26

Author(s):

B. Charlene Henderson ◽

Kevin Kobelsky ◽

Vernon J. Richardson ◽

Rodney E. Smith

Keyword(s):

Information Technology ◽

Stock Price ◽

Abnormal Returns ◽

Firm Level ◽

Policy Makers ◽

Market Participants ◽

Future Performance ◽

Long Run ◽

Level Information ◽

Information Technology Expenditures

ABSTRACT: Although information technology (hereafter, IT) expenditures represent an increasingly large investment for most corporations, firms are not required to disclose them separately in their financial statements. We hypothesize and find evidence that information about a firm’s IT expenditures helps explain its future performance as reflected in both accounting measures (residual income, earnings volatility) and market measures (stock price and long-run abnormal returns). In particular, we provide evidence of market mispricing and suggest the lack of firm-level annual IT expenditure disclosure as one potential reason for such mispricing. Altogether, the evidence presents a persuasive case that information about a firm’s IT expenditures is useful to stock market participants. The evidence we report is useful to managers and accounting policy makers contemplating the public disclosure of firm-level information about IT investments.

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