Information Technology Investment and Commercialized Innovation Performance: Dynamic Adjustment Costs and Curvilinear Impacts

Firms’ investment in information technology (IT) has been widely considered to be a key enabler of innovation. In this study, we integrate prior findings on the augmenting pathways (where IT investment supports innovation) with a new theory explaining the suppressing pathways (where dynamic adjustment costs associated with large IT investment can be detrimental to innovation) to propose an overall inverted U-shaped relationship between IT investment and commercialized innovation performance (CIP). To test our theory, we analyze a unique panel dataset from the largest economy in Europe and discovered a curvilinear relationship between IT investment and CIP for firms across a broad spectrum of industries. Our research presents empirical evidence corroborating the augmenting and suppressing pathways linking IT investment and CIP. Our findings serve as a cautionary signal to executives, discouraging overinvestment in IT.

How Information Technology Investment Affects Green Innovation in Chinese Heavy Polluting Enterprises

Promoting green innovation is an effective way to solve the increasingly serious environmental pollution problems in emerging economies. Information technology is constantly changing the operation mode of enterprises; however, whether information technology investment helps promote enterprises’ green innovation is still an important issue to be studied. According to resource-based and knowledge integration theory, this study constructs data from Chinese A-share listed heavy polluting enterprises during 2010–2018, adopting the panel data Tobit model to investigate the nexus between information technology investment and green innovation. Our empirical results demonstrate that the amount of information technology investment is positively correlated with the emerging levels of green patents in Chinese heavy polluting enterprises, and this positive correlation only significantly exists in state-owned enterprises (SOEs) and enterprises with a strong sense of environmental responsibility and strict environmental regulation. The findings of this study help understand in depth how information technology investment affects enterprises’ green innovation and its boundaries, which also have important policy implications for government departments and enterprises to make better use of information technology to deal with the challenge of environmental pollution.