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Paper Number
2625
Paper Type
Completed
Description
This study explores a novel question relating to responsiveness of IT investments, and documents three key findings. First, we find that firms adjust IT investments more actively in response to the revenue fluctuation during the 2001-2011 period than in the 1990-2000 period. Second, we find that underperforming firms are more likely to increase their IT investments in response to revenue increase in 2001-2011 than in 1990-2000, while outperforming firms are much more likely to decrease their IT investments in response to revenue decrease in 2001-2011 than in 1990-2000. Finally, underperforming firms have similar levels of adjustments in their IT investments in response to revenue decrease in both periods, while outperforming firms have similar levels of adjustments in their IT investments in response to revenue increase. We discuss the implications of these novel findings.
Recommended Citation
Xu, Zheyi; Liu, Chewei; and Mithas, Sunil, "How Do Firms Adjust IT Investments in Response to Revenue Changes? The Role of Computing Eras and Aspiration" (2023). ICIS 2023 Proceedings. 15.
https://aisel.aisnet.org/icis2023/itadopt/itadopt/15
How Do Firms Adjust IT Investments in Response to Revenue Changes? The Role of Computing Eras and Aspiration
This study explores a novel question relating to responsiveness of IT investments, and documents three key findings. First, we find that firms adjust IT investments more actively in response to the revenue fluctuation during the 2001-2011 period than in the 1990-2000 period. Second, we find that underperforming firms are more likely to increase their IT investments in response to revenue increase in 2001-2011 than in 1990-2000, while outperforming firms are much more likely to decrease their IT investments in response to revenue decrease in 2001-2011 than in 1990-2000. Finally, underperforming firms have similar levels of adjustments in their IT investments in response to revenue decrease in both periods, while outperforming firms have similar levels of adjustments in their IT investments in response to revenue increase. We discuss the implications of these novel findings.
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Comments
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