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A Lag Effect of IT Investment on Firm Performance

A Lag Effect of IT Investment on Firm Performance

Sangho Lee, Soung Hie Kim
Copyright: © 2008 |Pages: 28
ISBN13: 9781599045702|ISBN10: 1599045702|EISBN13: 9781599045726
DOI: 10.4018/978-1-59904-570-2.ch015
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MLA

Lee, Sangho, and Soung Hie Kim. "A Lag Effect of IT Investment on Firm Performance." Innovative Technologies for Information Resources Management, edited by Mehdi Khosrow-Pour, D.B.A., IGI Global, 2008, pp. 246-273. https://doi.org/10.4018/978-1-59904-570-2.ch015

APA

Lee, S. & Kim, S. H. (2008). A Lag Effect of IT Investment on Firm Performance. In M. Khosrow-Pour, D.B.A. (Ed.), Innovative Technologies for Information Resources Management (pp. 246-273). IGI Global. https://doi.org/10.4018/978-1-59904-570-2.ch015

Chicago

Lee, Sangho, and Soung Hie Kim. "A Lag Effect of IT Investment on Firm Performance." In Innovative Technologies for Information Resources Management, edited by Mehdi Khosrow-Pour, D.B.A., 246-273. Hershey, PA: IGI Global, 2008. https://doi.org/10.4018/978-1-59904-570-2.ch015

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Abstract

This chapter discusses the positive effects of IT investment on firm financial performance when a distinct range of characteristics is examined. The relationship between IT investment and firm performance considering the information intensity of the industry is explored using a distributed lag model. Findings indicate both a positive effect and a positive lag effect of IT investment. The effects of IT investment in the high information-intensive industry are significantly larger than in the low information-intensive industry. Furthermore, a lagged effect of IT investment is larger than an immediate effect, regardless of the information intensity of the industry. We conclude that firms in the high information-intensive industry need to be more cognizant of performance factors when investing in IT investment than in the low information-intensive industry. Moreover, it is necessary to consider the time lag between IT investment and firm performance.

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