IT Innovation Persistence and State Dependence: An Empirical Investigation

Jee Hae Lim, Theophanis C. Stratopoulos and Tony Wirjanto ()
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Jee Hae Lim: School of Accountancy, University of Waterloo
Theophanis C. Stratopoulos: School of Accountancy, University of Waterloo

No 8014, Working Papers from University of Waterloo, Department of Economics

Abstract: In this study we examine the persistence of a firm's ability to differentiate itself from its peers and stand out in a crowd of competitors through IT innovation. By using cross-sectional data set of large US firms from 1997-2004, our empirical evidence shows that prior IT innovation experience is an important determinant of current IT innovation capability even after we account for firm heterogeneity factors such as financial performance (halo effect), size, and industry. This evidence supports our proposition that there is a structural true state (path) dependence in the sense that prior IT innovation experience constrains future IT innovation choices and outputs. Therefore, the IT innovation capability is heterogeneously distributed and not easy to imitate.

Keywords: IT innovation Persistence; IT Capabilities; True State Dependence (search for similar items in EconPapers)
Date: 2008-12
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Persistent link: https://EconPapers.repec.org/RePEc:wat:wpaper:08014

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