Do Firms’ Characteristics Influence Their IT Strategies? A Study on the Driving Force behind Firms’ Decisions to Appoint IT Expertise

Ashraf Khallaf (), Anis Samet and Jap Efendi
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Ashraf Khallaf: Accounting Department, School of Business Administration, American University of Sharjah, Sharjah 86011, United Arab Emirates
Anis Samet: Finance Department, School of Business Administration, American University of Sharjah, Sharjah 86011, United Arab Emirates
Jap Efendi: Department of Economics, Finance and Accounting, Franke College of Business, Northern Arizona University, Flagstaff, AZ 86011, USA

JRFM, 2024, vol. 17, issue 10, 1-12

Abstract: The demand for information technology expertise has grown rapidly in the last few decades, signaling firms’ commitment to integrating IT into core business strategies. Understanding the conditions under which firms appoint a chief information officer (CIO) can provide valuable insights into the evolving role of IT in corporate governance. This study addresses a crucial gap in the literature by exploring the determinants of a firm’s decision to hire a CIO at the top management level. The study identifies several factors that influence a firm’s decision to appoint a CIO, including the firm’s size, its level of innovation, and its prior performance. The study examines these assertions by comparing the characteristics of firms that appoint a CIO at the top management level with those of similar firms in their industries that do not have a CIO position prior to the appointment. A logistic regression model that considers CIO firms and their matched firms indicates that firms that have larger capital expenditures, higher market value, or have experienced loss are more likely to hire a new CIO. Our study provides empirical evidence on why certain firms prioritize IT leadership at the executive level.

Keywords: chief information officer; IT governance; intellectual capital; R&D investments; IT leadership; firm characteristics (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
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