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The impact of adopting IT governance on financial performance: An empirical analysis among Brazilian firms

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  • Lunardi, Guilherme Lerch
  • Becker, João Luiz
  • Maçada, Antonio Carlos Gastaud
  • Dolci, Pietro Cunha

Abstract

Recently, there has been a great deal of interest on the part of many organizations in the concept of IT governance in order to justify IT investments. Some studies have shown that companies, which have good IT governance models, generate higher returns on their IT investments than their competitors. However, there is a lack of scientific research confirming that effective IT governance leads to better financial performance. In this paper, we attempt to determine whether companies that have adopted IT governance mechanisms have improved their financial performance, by measuring pre and post adoption performance indicators. We found that companies that adopted IT governance practices improved their performance when compared to the control group, particularly in relation to profitability. Furthermore, we found that the effects of adopting IT governance mechanisms on financial performance were more pronounced in the year following adoption than in the year in which they were adopted.

Suggested Citation

  • Lunardi, Guilherme Lerch & Becker, João Luiz & Maçada, Antonio Carlos Gastaud & Dolci, Pietro Cunha, 2014. "The impact of adopting IT governance on financial performance: An empirical analysis among Brazilian firms," International Journal of Accounting Information Systems, Elsevier, vol. 15(1), pages 66-81.
    • Handle: RePEc:eee:ijoais:v:15:y:2014:i:1:p:66-81
    DOI: 10.1016/j.accinf.2013.02.001
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    References listed on IDEAS

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    Cited by:

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    2. Adriano Olímpio Tonelli & Paulo Henrique Souza Bermejo & Pâmela Aparecida dos Santos & Larissa Zuppo & André Luiz Zambalde, 0. "It governance in the public sector: a conceptual model," Information Systems Frontiers, Springer, vol. 0, pages 1-18.
    3. Ali, Irfan, 2016. "The impact of ERP implementation on the financial performance of the firm : An empirical study," Other publications TiSEM 876506f5-1aed-4421-aa2c-0, Tilburg University, School of Economics and Management.
    4. Faozi A. Almaqtari & Najib H. S. Farhan & Hamood Mohammed Al-Hattami & Tamer Elsheikh, 2023. "The moderating role of information technology governance in the relationship between board characteristics and continuity management during the Covid-19 pandemic in an emerging economy," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-16, December.
    5. Allam Hamdan & Reem Khamis & Mohammed Anasweh & Mukhtar Al-Hashimi & Anjum Razzaque, 2019. "IT Governance and Firm Performance: Empirical Study From Saudi Arabia," SAGE Open, , vol. 9(2), pages 21582440198, April.
    6. Basheer Ahmad Khamees, 2023. "Information Technology Governance and Bank Performance: A Situational Approach," IJFS, MDPI, vol. 11(1), pages 1-21, March.
    7. Wilkin, Carla L. & Couchman, Paul K. & Sohal, Amrik & Zutshi, Ambika, 2016. "Exploring differences between smaller and large organizations' corporate governance of information technology," International Journal of Accounting Information Systems, Elsevier, vol. 22(C), pages 6-25.
    8. Samir Hammami & Omar Durrah & Syed Ahsan Jamil & Mohammedosman Eltigani, 2022. "Engaging Knowledge Capabilities to Sustain the Application of Information Technology Governance in Healthcare Institutions," SAGE Open, , vol. 12(4), pages 21582440221, October.
    9. Choi, Dongjoon & Lee, Hansol & Lee, Ho-Young & Park, Hyun-Young, 2021. "The association between human resource investment in IT controls over financial reporting and investment efficiency," International Journal of Accounting Information Systems, Elsevier, vol. 43(C).
    10. Adriano Olímpio Tonelli & Paulo Henrique Souza Bermejo & Pâmela Aparecida dos Santos & Larissa Zuppo & André Luiz Zambalde, 2017. "It governance in the public sector: a conceptual model," Information Systems Frontiers, Springer, vol. 19(3), pages 593-610, June.
    11. Zhen, Jie & Xie, Zongxiao & Dong, Kunxiang, 2021. "Impact of IT governance mechanisms on organizational agility and the role of top management support and IT ambidexterity," International Journal of Accounting Information Systems, Elsevier, vol. 40(C).

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