Understanding Cross-Level Interactions of Firm-Level Information Technology and Industry Environment: A Multilevel Model of Business Value

Matt Wimble, Harminder Singh and Brandis Phillips
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Matt Wimble: University of Michigan Dearborn, Dearborn, MI, USA
Harminder Singh: Auckland University of Technology, Auckland, New Zealand
Brandis Phillips: North Carolina Agricultural and Technical State University, Greensboro, NC, USA

Information Resources Management Journal (IRMJ), 2018, vol. 31, issue 1, 1-20

Abstract: This article contends that although much research on the business value of IT focuses on firm-level impacts, studies have begun incorporating industry-level variables as explanatory factors of interest to offer better contextualized explanations for the differences in value firms obtained from their IT across different industries. The authors present a multi-level model of IT value where industry-level and firm-level factors jointly determine the value a firm obtains from its IT. By using a nested model to examine industry to firm interactions, they are able to control for problematic violations of statistical assumptions that are likely to bias estimates from conventional methods. Their analysis shows that all of the industry factors we examined had significant interaction effects. Specifically, industry concentration, industry growth, industry capital intensity, industry outsourcing, and presence in service sector significantly impact firm-level IT value. More interestingly, the authors find these impacts manifest not as mean differences between industries, but rather as interactions with firm-level effects.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:igg:rmj000:v:31:y:2018:i:1:p:1-20

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