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The impact of traditional information technology resources on organizational agility and performance has been extensively studied. However, strategic information systems research still lacks a deeper understanding about the value creation mechanisms of strategic investments in emergent and innovative digital technologies like analytics, big data, cloud, social media and mobile platforms. Drawing on the digital options theory and dynamic capability theory, we propose a conceptual model in which the positive effect of digital business intensity on competitive advantage is mediated by sensing and responding agility, two underlying dimensions of organizational agility. Empirical analyses of survey-based data from 342 German firms suggest that digital business intensity is positively related to both sensing and responding agility. Moreover, sensing and responding agility mediate the relationship between digital business intensity and competitive advantage. Consequently, this study contributes to the literature by shedding light on the value creation mechanisms of strategic investments in digital technologies.



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