A new look at returns of information technology: firms’ diversification to IT service market and firm value

Wenbin Sun (), Zhihua Ding () and Xiaobo Xu ()
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Wenbin Sun: Rockhurst University
Zhihua Ding: China University of Mining and Technology
Xiaobo Xu: Xi’an Jiaotong-Liverpool University

Information Technology and Management, 2021, vol. 22, issue 1, No 2, 13-31

Abstract: Abstract Firms that are traditionally not in the scope of IT increasingly develop IT services as new business lines to create better customer offering portfolios. The current research takes the first step to theoretically explore and empirically examine how these firms’ diversification to IT services may affect their performance as reflected in firm value. Furthermore, these relationships are modeled into three key interactions with firm size, firm age, and firm service intensity, to decode the differential roles of this diversification strategy on firm shareholder welfare in the varying scenarios along with the moderators. This research generates implications for theories such as IT and knowledge management, resource-based theories, and it provides practical implications for business managers.

Keywords: Information services; Diversification; Firm value; Firm idiosyncratic risk; Moderating effects (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s10799-021-00322-y

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