Research Note--The Impact of Information Technology Investments and Diversification Strategies on Firm Performance

Murali D. R. Chari (), Sarv Devaraj () and Parthiban David ()
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Murali D. R. Chari: School of Business and Economics, Indiana University South Bend, South Bend, Indiana 46634
Sarv Devaraj: Mendoza College of Business, University of Notre Dame, Notre Dame, Indiana 46556
Parthiban David: Division of Management, Price College of Business, University of Oklahoma, Norman, Oklahoma 73019

Management Science, 2008, vol. 54, issue 1, 224-234

Abstract: As companies continue to make large investments in information technology (IT), questions about how and in what contexts such investments pay off have gained importance. We develop a theoretical framework to explain how IT investments could pay off in the economically significant context of corporate diversification, and empirically find that the performance pay off to IT investments is greater for firms with greater levels of diversification. We also find that the performance payoff to IT investments is greater in related diversification than in unrelated diversification.

Keywords: information technology investments; business strategy; corporate diversification (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:54:y:2008:i:1:p:224-234

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