A Meta-Analysis of the Effects of IT Investment on Firm Financial Performance

2011 ◽  
Vol 25 (2) ◽  
pp. 145-169 ◽  
Author(s):  
Jee-Hae Lim ◽  
Bruce Dehning ◽  
Vernon J. Richardson ◽  
Rodney E. Smith
Keyword(s):  
Financial Performance ◽  
Meta Analysis ◽  
Theory Development ◽  
It Investment ◽  
It Capability ◽  
Firm Financial Performance ◽  
And Performance ◽  
Research Choices ◽  
The Relationship ◽  
Future Theory

ABSTRACT We use meta-analysis techniques to examine research choices that affect findings with respect to the return on IT investment. Recent research has established that IT investment is substantially related to firm financial performance. We find, however, that the relationship between IT investment and performance varies, depending on how both financial performance and IT investment are measured. Despite criticism of accounting measures as indicators of IT payoff, we find that the relationship is often stronger in studies that employ accounting measures rather than market measures of firm performance. This difference is driven by research that focuses on the process-level impacts of IT investment. Furthermore, the relationship is also stronger when IT investment is measured as IT strategy or spending, rather than IT capability. We discuss the practical implications of the results of our meta-analysis and suggest new directions for future theory development and research.

scholarly journals Strategic Management and Firm Performance

2019 ◽  
Vol 7 (03) ◽  
Author(s):  
Dr. Sadudin Ibraimi
Keyword(s):  
Firm Performance ◽  
Strategic Management ◽  
Financial Performance ◽  
Empirical Studies ◽  
Business Strategies ◽  
Firm Financial Performance ◽  
And Performance ◽  
In The Beginning ◽  
The Relationship

This paper discusses the relationship between business strategies of firms and their performances. In the beginning the strategic aspects of the concept are presented, then competition and performance and their linkage to strategy is discussed. This is followed by the discussion of several empirical studies on the determinants of firm financial performance. Researches confirm that firms within the same industry differ from one another, and that there seems to be an inertia associated with these differences.

A Meta-Analysis of the Relationship Between Chief Executive Officer Tenure and Firm Financial Performance: The Moderating Effects of Chief Executive Officer Pay and Board Monitoring

2021 ◽  
pp. 105960112198957
Author(s):  
Xian Cao ◽  
Junyon Im ◽  
Imran Syed
Keyword(s):  
Financial Performance ◽  
Chief Executive Officer ◽  
Positive Relationship ◽  
Meta Analysis ◽  
Chief Executive ◽  
Firm Financial Performance ◽  
Ceo Tenure ◽  
Ceo Pay ◽  
Board Monitoring ◽  
The Relationship

Prior empirical research investigating the relationship between chief executive officer (CEO) tenure and firms’ financial performance has shown inconclusive results. Based on arguments of agency and behavioral agency theories, we suggest that this relationship is nuanced and may vary depending on CEO pay and board monitoring. In response to these arguments, we meta-analytically test 385 studies ( n = 1,029,602). We find that CEO tenure is positively related to firms’ financial performance. This positive relationship is enhanced when CEOs receive higher cash compensation or hold more stock ownership. On the other hand, the above positive relationship becomes weaker when CEOs receive higher long-term incentives or when the firm has more independent board directors. These findings suggest that CEO pay and board monitoring, or agency mechanisms in general, can offer new research avenues to help explore boundary conditions of the CEO tenure and firms’ financial performance relationship.

scholarly journals Moderating Effect of Firm Characteristics on the Relationship between Electric Power Outage Dynamics and Financial Performance of Manufacturing Firms in Kenya

2021 ◽  
Vol 17 (1) ◽  
Author(s):  
Winfred Wanjiku Njiraini ◽  
Mirie Mwangi ◽  
Erasmus Kaijage ◽  
Pokhariyal Ganesh
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Electric Power ◽  
Manufacturing Firms ◽  
Firm Characteristics ◽  
Power Outages ◽  
Power Outage ◽  
Firm Financial Performance ◽  
And Performance ◽  
The Relationship

Past literatures on the correlational link between electric power outage dynamics and performance of manufacturing firms, in most economies, have portrayed a controversial conceptual debate amongst scholars with little focus on the moderating role played by firm characteristics. This paper focuses on determining the effect of firm characteristics (capital structure) on the relationship between electric power outage dynamics and financial performance of manufacturing firms in Kenya. Positivism philosophical point of view and descriptive survey research design was utilized. A population of 447 manufacturing firms in Kenya, which were also members of Kenya Manufacturers Association, was selected out of which a sample size of 138 firms was drawn using stratified random sampling methodology. Structured questionnaires were utilized to collect data which involved drop and pick approach. The research results indicate that the relationship between electric power outage dynamics and performance of manufacturing firms in Kenya is not significantly moderated by firm characteristics. This study outcome augments existing knowledge on electric power outage dynamics in relation to firm characteristics and financial performance. This is because it is evident that top management should not focus on capital structure as a conditional factor when making decisions aimed at enhancing firm financial performance under power outage conditions. The study has also made an input to the academic literature ascending from empirical reinforcement of tradeoff theory and pecking order theory in making determination on firms’ capital investments. Policy makers and power utilities benefit in understanding the negative effect of power outages on the performance of firms are therefore guided in overseeing the planning and implementation of proper electricity infrastructure. Kenya Association of Manufacturers (KAM) will find these research findings useful in guiding their member firms on strategies to adopt to ensure continuous productivity and safeguard damages to the firm as a result of electric power outages.

Effects of Formal Strategic Planning on Financial Performance in Small Firms: A Meta-Analysis

1993 ◽  
Vol 17 (3) ◽  
pp. 53-64 ◽  
Author(s):  
Charles R. Schwenk ◽  
Charles B. Shrader
Keyword(s):  
Firm Performance ◽  
Strategic Planning ◽  
Financial Performance ◽  
Small Firm ◽  
Small Firms ◽  
Sampling Error ◽  
Meta Analysis ◽  
Firm Financial Performance ◽  
And Performance ◽  
First Time

Researchers have been examining the effects of formal strategic planning on small firm financial performance for more than twenty years. Reviewers of prior studies have drawn differing conclusions as to whether formal planning improves small firm performance. We have applied meta-analysis for the first time to the results of previous studies on formal strategic planning and small firm performance. The results suggest that even though the size of the effects for planning for individual studies Is not large, the overall relationship between formal planning and performance across studies Is positive and significant. Much of the variance in the size of the effects, however, Is not explained by sampling error, Indicating the potential for other variables to moderate the effects of planning on the performance of small firms. It is concluded, in general, that strategic planning is a beneficial activity for small firms.

scholarly journals A RESOURCE-BASED PERSPECTIVE ON THE RELATIONSHIP BETWEEN SERVICE DIVERSIFICATION AND FIRM PERFORMANCE: EVIDENCE FROM ITALIAN FACILITY MANAGEMENT FIRMS

2012 ◽  
Vol 13 (3) ◽  
pp. 567-585 ◽  
Author(s):  
Claudio Giachetti
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Competitive Advantage ◽  
Service Industry ◽  
Facility Management ◽  
Firm Financial Performance ◽  
Diversification Strategies ◽  
And Performance ◽  
Levels Of Service ◽  
The Relationship

In this article, a theoretical framework to study the effect of service diversification on firm financial performance is demonstrated. Data on 48 Italian facility management firms from between 2000 and 2009 show a consistent inverse U-shaped relationship between service diversification and firm performance, with the slope positive at low and moderate levels of service diversification but negative at high levels of service diversification. Further, the results show that firm experience in the service industry and firm affiliation to a consortium positively moderate the relationship between service diversification and performance. The results of this study provide evidence of the importance of service diversification strategies for gaining a competitive advantage.

Team Learning Behaviors and Performance: A Meta-Analysis of Direct Effects and Moderators

2021 ◽  
pp. 105960112110169
Author(s):  
Christopher W. Wiese ◽  
C. Shawn Burke ◽  
Yichen Tang ◽  
Claudia Hernandez ◽  
Ryan Howell
Keyword(s):  
Team Performance ◽  
Team Learning ◽  
Task Complexity ◽  
Meta Analysis ◽  
Sample Type ◽  
Learning Behaviors ◽  
Learning Teams ◽  
And Performance ◽  
The Relationship ◽  
Team Familiarity

Under what conditions do team learning behaviors best predict team performance? The current meta-analytic efforts synthesize results from 113 effect sizes and 7758 teams to investigate how different conceptualizations (fundamental, intrateam, and interteam), team characteristics (team size and team familiarity), task characteristics (interdependence, complexity, and type), and methodological characteristics (students vs. nonstudents and measurement choice) affect the relationship between team learning behaviors and team performance. Our results suggest that while different conceptualizations of team learning behaviors independently predict performance, only intrateam learning behaviors uniquely predict performance. A more in-depth investigation into the moderating conditions contradicts the familiar adage of “it depends.” The strength of the relationship between intrateam learning behaviors and team performance did not depend on team familiarity, task complexity, or sample type. However, our results suggested this relationship was stronger in larger teams, teams with moderate task interdependence, teams performing project/action tasks, and studies that use measures that capture a wider breadth of the team learning behavior construct space. These efforts suggest that common boundary conditions do not moderate this relationship. Scholars can leverage these results to develop more comprehensive theories addressing the different conceptualizations of team learning behaviors as well as providing clarity on the scenarios where team learning behaviors are most needed. Further, practitioners can use our results to develop more guided team-based policies that can overcome some of the challenges of forming and developing learning teams.

Diversity in Alliance Portfolios and Performance Outcomes: A Meta-Analysis

2014 ◽  
Vol 43 (5) ◽  
pp. 1472-1497 ◽  
Author(s):  
Donghun (Don) Lee ◽  
Katie Kirkpatrick-Husk ◽  
Ravi Madhavan
Keyword(s):  
Positive Impact ◽  
Theoretical Orientation ◽  
Meta Analysis ◽  
Performance Outcomes ◽  
Alliance Portfolio ◽  
Quantitative Synthesis ◽  
And Performance ◽  
The Relationship ◽  
Level Of Analysis ◽  
Alliance Portfolios

Given the increasing interest in alliance portfolios, alliance portfolio diversity (APD) has been the focus of many recent studies. Yet, the performance consequences of APD—or of diversity in general—are neither theoretically clear nor empirically consistent. With meta-analytic analyses, we assess extant research on the APD–performance link. Across studies, APD has a positive impact on performance, although the level of analysis and how performance is measured influence the relationship. Going beyond conventional quantitative synthesis, however, we also systematically uncover patterns in how theoretical orientation and the operationalization of diversity moderate the APD–performance relationship. Our study serves as an invitation for future APD studies to employ more sophisticated theoretical and operationalization approaches as they expand our knowledge of diversity in alliance portfolios.

Financing Decisions and Performance of Italian SMEs in the Hotel Industry

2018 ◽  
Vol 60 (4) ◽  
pp. 335-354 ◽  
Author(s):  
Marco Botta
Keyword(s):  
Capital Structure ◽  
Financial Performance ◽  
Optimal Level ◽  
Pecking Order ◽  
Optimal Capital Structure ◽  
Financing Decisions ◽  
Medium Enterprise ◽  
Optimal Capital ◽  
And Performance ◽  
The Relationship

This study investigates the existence of an optimal capital structure for small and medium enterprise (SME) hotels through the analysis of the relationship between financing decisions and financial performance in a large sample of Italian hotel SMEs. The results show that hotel SMEs face an optimal capital structure that allows them to maximize returns to investors, while instead having both too little and too much debt reduces their financial performance. This notwithstanding, we show that hotel SMEs are not particularly concerned with optimizing their capital structure, and their funding behavior is deeply connected with the availability of internally available funds, a typical pecking order behavior, and they result extremely slow in converging toward their optimal level of leverage so that they could improve their performance by adopting a more sophisticated financial strategy.

scholarly journals Financial capital, constraints, partners, and performance: An empirical analysis of Indonesia SMEs

2021 ◽  
Vol 18 (2) ◽  
pp. 210
Author(s):  
I Wayan Widnyana ◽  
I Made Dauh Wijana ◽  
Almuntasir Almuntasir
Keyword(s):  
Financial Performance ◽  
Financial Constraints ◽  
Small And Medium Enterprises ◽  
Value Added ◽  
Financial Capital ◽  
Moderation Effect ◽  
And Performance ◽  
Medium Enterprises ◽  
The Relationship

Indonesia's small and medium enterprises (SMEs) are considered the backbone of the national economy. However, the fact that SMEs still contribute less to the national gross domestic product (GDP) in terms of value-added, need to be addressed. While previous studies mainly focused on financial (access) constraints as one of the major constraints faced by small enterprises which affect their growth and performances, this study aims to extend the relationship between capital and financial performance of Indonesia SMEs with the moderating effect of financial constraints and partners. This study is different from others as it uses a bigger panel dataset which is about 4.36 million SMEs in Indonesia and is the first to explore the role of financial partners comprehensively. Moreover, the panel regression model with geographic analysis unit uses as a data analysis method. The results of the study show that financial capital has a positive and significant effect on the financial performance of SMEs. Furthermore, while the moderation role of financial partners on the relationship between financial capital and financial performance of Indonesia SMEs was failed to prove, the negative moderation effect of financial constraints was able to prove in this study.

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