The contribution of information technology (IT) to organizational performance has been investigated extensively in the MIS research recently. In this paper, the relationship between the relative size of IT investments by firms and the productive efficiency is examined using stochastic frontiers. We find evidence that the level of IT investments has a positive effect on the firm’s productive efficiency, implying that the firms investing relatively more in IT are likely to be more efficient in their production processes than those that invest less.
Lin, Winston and Shao, Benjamin, "Efficiency Gains from the Relative Size of Information Technology Investments" (1998). AMCIS 1998 Proceedings. 247.