The moderating effect of information technology intensity on the relationship between inventory leanness and firm profitability

Naoya Kamada ()
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Naoya Kamada: Hokusei Gakuen University

Operations Management Research, 2025, vol. 18, issue 4, No 5, 1193-1207

Abstract: Abstract This study examines the impact of inventory leanness on firm profitability and explores how information technology (IT) intensity moderates this relationship. Drawing on prior empirical research and information processing theory, we hypothesize that inventory leanness positively influences firm profitability and that IT intensity strengthens this effect. Using archival data from the Basic Survey of Japanese Business Structure and Activities, we construct a large panel dataset comprising 16,022 firm-year observations from 2,620 unique retail firms in Japan over 2010–2019. Fixed-effects panel regression analyses reveal that IT intensity significantly moderates the positive relationship between inventory leanness and firm profitability. Additionally, while an inverted U-shaped relationship appears in robustness checks, this effect is likely spurious. Our findings suggest that inconsistent results in prior literature may partly reflect spurious inverted U-shaped effects. This study contributes to operations management research by clarifying the contingent role of IT in inventory leanness and its implications for firm performance.

Keywords: Inventory leanness; Firm financial performance; IT intensity; Moderation effect; Panel regression; Archival data (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s12063-025-00564-x

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