Information Technology Spending Association with Organizational Productivity and Performance: A Study of the Mexican Banking Industry, 1982-1992

Information Technology Spending Association with Organizational Productivity and Performance: A Study of the Mexican Banking Industry, 1982-1992

Carlos J. Navarrete (California State Polytechnic University, USA) and James B. Pick (University of Redlands, USA)
DOI: 10.4018/978-1-59140-038-7.ch004
OnDemand PDF Download:
$37.50

Abstract

This chapter examines the relationship between IT expenditure and bank profitability, efficiency, productivity, and performance for Mexican banks. The principal research method is correlation analysis between IT expenditure and four bank performance indices: a profitability index that combines bank profits, income, operational cost, and financial cost; a performance index that includes credit and bank income market share; a productivity index consisting of the number of employees, branches, and managers; and an efficiency index that includes banks’ operational cost and income. The unit of analysis is the firm. The data are from the 18 banks comprising the Mexican banking industry from 1982–1992, when Mexico’s banks were owned by the federal government. The study’s interpretations are supported by interviews with four bank CIOs and a CEO, in office during the period. The main findings are that bank IT expenditure ratio is positively correlated to bank performance and productivity indices, whereas IT expenditure is not correlated with bank efficiency or profitability indices. There are fluctuations in the strength of correlation during the 11-year period, which are explained. The chapter results not only reject the productivity paradox but also provide insights to explain the paradox and IT contribution to the firm performance.

Complete Chapter List

Search this Book:
Reset
Table of Contents
Chapter 1
Paul P. Tallon, Kenneth L. Kraemer
Although business executives remain skeptical about the extent of payoffs from investment in information technology (IT), strategic alignment or the... Sample PDF
Investigating the Relationship between Strategic Alignment and Information Technology Business Value: The Discovery of a Paradox
$37.50
Chapter 2
Ra’ed M. Shams, Frederick P. Wheeler
The concept of strategic alignment between organizational policies for business and information systems (IS) has not been defined previously in... Sample PDF
Information-Induced Strategic Alignment: Toward a Semiological Analysis
$37.50
Chapter 3
Kristina Setzekorn, Arun Rai, Arlyn J. Melcher
This chapter describes an empirical analysis of the mediating effects of supply chain coordination strategy and manufacturing IT infrastructure on... Sample PDF
Inventory Productivity Impacts of IT-Enabled Supply Chain Coordination in Manufacturing Environments
$37.50
Chapter 4
Carlos J. Navarrete, James B. Pick
This chapter examines the relationship between IT expenditure and bank profitability, efficiency, productivity, and performance for Mexican banks.... Sample PDF
Information Technology Spending Association with Organizational Productivity and Performance: A Study of the Mexican Banking Industry, 1982-1992
$37.50
Chapter 5
Namchul Shin
Most information systems (IS) research has examined the impact of information technology (IT) on the organization of economic activities by starting... Sample PDF
An Empirical Analysis of Productivity Gains from Information Technology's Reduction of Coordination Costs
$37.50
Chapter 6
Carlos J. Navarrete, James B. Pick
This paper analyzes the relationship between IT expenditure and the monetary value of organizations. Based on the case of the Mexican banking... Sample PDF
Information Technology Spending and the Value of the Firm: The Case of Mexican Banks
$37.50
Chapter 7
Jatinder N.D. Gupta, Sushil K. Sharma
Electronic commerce (E-Commerce) has been the world’s fastest growing industry and has made a big impact on businesses. The impact of e-commerce on... Sample PDF
Creating Business Value through E-Commerce
$37.50
Chapter 8
Bernd C. Stahl
This chapter explores the question of the value of information technology from a wider angle than the usual financial perspective. The central... Sample PDF
The Moral and Business Value of Information Technology: What to do in Case of a Conflict?
$37.50
Chapter 9
Susan J. Chinburg, Ramesh Sharda, Mark Weiser
Information technology (IT) has become a critical functionality for business today. Choosing the appropriate network security that will protect IT... Sample PDF
Establishing the Business Value of Network Security Using Analytical Hierarchical Process
$37.50
Chapter 10
Bongsik Shin, Daniel C. Kinsella Jr.
An Internet-based Virtual Private Network (IVPN) is a system and service that enables secure communication within a controlled user group across the... Sample PDF
Increasing Business Value of Communications Infrastructure: The Case of Internet-based Virtual Private Networks
$37.50
Chapter 11
Bahador Ghahramani
The Optimization Model for Telecommunication Systems (OMTS) is designed and developed to optimize System Designers and Developers (SD&D) efforts in... Sample PDF
An Optimization Model for Telecommunication Systems
$37.50
Chapter 12
Ron Craig
Two important forces are at work today in the Canadian and global economies. First is the traditional force of small- and medium-sized enterprises... Sample PDF
Web Initiatives and E-Commerce Strategy: How Do Canadian Manufacturing SMEs Compare?
$37.50
Chapter 13
Simpson Poon
The importance of management and Information Technology (IT) success had been repeatedly identified in small business IT studies (for example... Sample PDF
Management's Contribution to Internet Commerce Benefit - Experiences of Online Small Businesses
$37.50
Chapter 14
Mohini Singh
Australian small businesses are increasingly adopting the Internet and the World Wide Web as a medium of doing business to reach new customers and... Sample PDF
Electronic Commerce Opportunities, Challenges and Organizational Issues for Australian SMEs
$37.50
About the Authors