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Paper Number

1599

Paper Type

Complete

Description

Digital innovation is both a necessary and a challenging endeavor for most firms. To achieve progress in this regard, firms across contexts increasingly set up digital innovation units (DIUs). Despite its popularity in practice, the prospects of this initiative are to date unclear. Building upon dynamic capabilities theory, we hypothesize the performance implications of DIUs and employ panel data regressions to a longitudinal and cross-industry data-set to investigate our predictions. We find that DIUs increase performance and that this effect is strengthened by the presence of digital ventures in the industry as well as the degree to which the industry relies on tangible assets. Our additional analyses provide a nuanced perspective on the implications of DIU establishments. On the base of these findings, we derive important implications for IS research about digital innovation and transformation as well as DIUs and provide recommendations for managerial practice.

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Dec 12th, 12:00 AM

Digital Innovation Units: An Empirical Investigation of Performance Implications

Digital innovation is both a necessary and a challenging endeavor for most firms. To achieve progress in this regard, firms across contexts increasingly set up digital innovation units (DIUs). Despite its popularity in practice, the prospects of this initiative are to date unclear. Building upon dynamic capabilities theory, we hypothesize the performance implications of DIUs and employ panel data regressions to a longitudinal and cross-industry data-set to investigate our predictions. We find that DIUs increase performance and that this effect is strengthened by the presence of digital ventures in the industry as well as the degree to which the industry relies on tangible assets. Our additional analyses provide a nuanced perspective on the implications of DIU establishments. On the base of these findings, we derive important implications for IS research about digital innovation and transformation as well as DIUs and provide recommendations for managerial practice.

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