Impact of Information Technology Infrastructure Flexibility on Mergers and Acquisitions

Jose Benitez, Gautam Ray and Jörg Henseler
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Jose Benitez: ESC [Rennes] - ESC Rennes School of Business
Jörg Henseler: ULISBOA - Universidade de Lisboa = University of Lisbon = Université de Lisbonne

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Abstract: Although mergers and acquisitions (M&A) are a common strategy to reduce costs and pursue growth, the variance in returns from M&A is very high. This research examines how information technology (IT) infrastructure flexibility affects M&A. We use a combination of secondary as well as matched-pair survey data from 100 mid-size firms in Spain to investigate this relationship. The empirical analysis suggests that IT infrastructure flexibility affects M&A through two key pathways: a flexible IT infrastructure facilitates the development of business flexibility that provides the responsiveness to seize M&A opportunities and make acquisitions, and a flexible IT infrastructure facilitates the development of post-M&A IT integration capability that provides the control to integrate the IT and business resources of the acquired firm and realize the economic benefits from M&A.

Keywords: Dynamic capability; IT infrastructure flexibility; business flexibility; post-M&A IT integration capability; M&A activities; post-M&A performance; business value of IT; endogeneity (search for similar items in EconPapers)
Date: 2018-01-01
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Citations: View citations in EconPapers (32)

Published in MIS Quarterly, 2018, 42 (1), pp.25-43. ⟨10.25300/MISQ/2018/13245⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01998000

DOI: 10.25300/MISQ/2018/13245

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