Information technology capability as competitive advantage in emerging markets

Bharat Arora and Zillur Rahman

International Journal of Emerging Markets, 2017, vol. 12, issue 3, 447-463

Abstract: Purpose - The purpose of this paper is to examine the impact of superior IT capability on financial performance of firms in the chemicals and chemical products industry in India. Design/methodology/approach - Financial performance of 28 firms with superior IT capability has been compared with benchmark over a period of six years. Findings - This research has five important findings for the chemicals and chemical products industry in India: there is positive association between superior IT capability and return on sales (ROS); firms with superior IT capability are able to earn higher margins on their products; asset turn of firms with superior IT capability is less than benchmark; capital markets give higher valuation to firms with superior IT capability; and this superior performance in terms of better ROS and higher capital market valuation is sustainable over a period of time. Originality/value - This is the first empirical study that has analysed the influence of IT capability on financial performance of firms in a specific industry in the context of India.

Keywords: Information technology; India; Competitive advantage; Emerging markets; Business value of IT; Chemicals industry (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:ijoem-07-2015-0127

DOI: 10.1108/IJoEM-07-2015-0127

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