IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i18p7374-d410690.html
   My bibliography  Save this article

Exploring the Effect of Digital Investment on IT Innovation

Author

Listed:
  • Joseph K. Nwankpa

    (Farmer School of Business, Miami University, 800 E. High St. Oxford, OH 45056, USA)

  • Jeffrey W. Merhout

    (Farmer School of Business, Miami University, 800 E. High St. Oxford, OH 45056, USA)

Abstract

Using the technology-organization-environment framework, this study examines three antecedents of digital investment as well as the influence of digital investment on IT innovation. The empirical evidence from a sample of Chief Information Officers (CIO)from US firms suggests that IT competence, competitive pressure and organizational agility are key factors that influence digital investment. Furthermore, the findings confirm the positive relationship between digital investment and IT innovation. Contrary to prior research, IT competence did not have a significant relationship with IT innovation. However, the results revealed that digital investment mediated the relationship between IT competence and IT innovation.

Suggested Citation

  • Joseph K. Nwankpa & Jeffrey W. Merhout, 2020. "Exploring the Effect of Digital Investment on IT Innovation," Sustainability, MDPI, vol. 12(18), pages 1-26, September.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:18:p:7374-:d:410690
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/18/7374/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/18/7374/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Abhay Nath Mishra & Prabhudev Konana & Anitesh Barua, 2007. "Antecedents and Consequences of Internet Use in Procurement: An Empirical Investigation of U.S. Manufacturing Firms," Information Systems Research, INFORMS, vol. 18(1), pages 103-120, March.
    2. Hess, Thomas & Matt, Christian & Benlian, Alexander & Wiesböck, Florian, 2016. "Options for Formulating a Digital Transformation Strategy," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 81032, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    3. Youngjin Yoo & Richard J. Boland & Kalle Lyytinen & Ann Majchrzak, 2012. "Organizing for Innovation in the Digitized World," Organization Science, INFORMS, vol. 23(5), pages 1398-1408, October.
    4. Paul A. Pavlou & Omar A. El Sawy, 2006. "From IT Leveraging Competence to Competitive Advantage in Turbulent Environments: The Case of New Product Development," Information Systems Research, INFORMS, vol. 17(3), pages 198-227, September.
    5. Kevin Zhu & Kenneth L. Kraemer, 2005. "Post-Adoption Variations in Usage and Value of E-Business by Organizations: Cross-Country Evidence from the Retail Industry," Information Systems Research, INFORMS, vol. 16(1), pages 61-84, March.
    6. Premkumar, G. & Roberts, Margaret, 1999. "Adoption of new information technologies in rural small businesses," Omega, Elsevier, vol. 27(4), pages 467-484, August.
    7. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    8. E. Burton Swanson, 1994. "Information Systems Innovation Among Organizations," Management Science, INFORMS, vol. 40(9), pages 1069-1092, September.
    9. Jaideep Anand & Raffaele Oriani & Roberto S. Vassolo, 2010. "Alliance Activity as a Dynamic Capability in the Face of a Discontinuous Technological Change," Organization Science, INFORMS, vol. 21(6), pages 1213-1232, December.
    10. Díaz-Chao, Ángel & Sainz-González, Jorge & Torrent-Sellens, Joan, 2015. "ICT, innovation, and firm productivity: New evidence from small local firms," Journal of Business Research, Elsevier, vol. 68(7), pages 1439-1444.
    11. Kevin Zhu & Kenneth L. Kraemer & Sean Xu, 2006. "The Process of Innovation Assimilation by Firms in Different Countries: A Technology Diffusion Perspective on E-Business," Management Science, INFORMS, vol. 52(10), pages 1557-1576, October.
    12. Hess, Thomas & Matt, Christian & Benlian, Alexander & Wiesböck, Florian, 2016. "Options for Formulating a Digital Transformation Strategy," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 82423, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    13. Joseph K. Nwankpa & Yaman Roumani & Alan Brandyberry & Alfred Guiffrida & Michael Hu & Murali Shanker, 2013. "Understanding the Link Between Initial ERP Systems and ERP-Enabled Adoption," Information Resources Management Journal (IRMJ), IGI Global, vol. 26(4), pages 18-39, October.
    14. Landon Kleis & Paul Chwelos & Ronald V. Ramirez & Iain Cockburn, 2012. "Information Technology and Intangible Output: The Impact of IT Investment on Innovation Productivity," Information Systems Research, INFORMS, vol. 23(1), pages 42-59, March.
    15. Paul Chwelos & Izak Benbasat & Albert S. Dexter, 2001. "Research Report: Empirical Test of an EDI Adoption Model," Information Systems Research, INFORMS, vol. 12(3), pages 304-321, September.
    16. William H. DeLone & Ephraim R. McLean, 1992. "Information Systems Success: The Quest for the Dependent Variable," Information Systems Research, INFORMS, vol. 3(1), pages 60-95, March.
    17. Erik Brynjolfsson & Lorin M. Hitt, 2000. "Beyond Computation: Information Technology, Organizational Transformation and Business Performance," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 23-48, Fall.
    18. George P. Huber & Danial J. Power, 1985. "Retrospective reports of strategic‐level managers: Guidelines for increasing their accuracy," Strategic Management Journal, Wiley Blackwell, vol. 6(2), pages 171-180, April.
    19. Wynne W. Chin & Barbara L. Marcolin & Peter R. Newsted, 2003. "A Partial Least Squares Latent Variable Modeling Approach for Measuring Interaction Effects: Results from a Monte Carlo Simulation Study and an Electronic-Mail Emotion/Adoption Study," Information Systems Research, INFORMS, vol. 14(2), pages 189-217, June.
    20. Michael J. Tippins & Ravipreet S. Sohi, 2003. "IT competency and firm performance: is organizational learning a missing link?," Strategic Management Journal, Wiley Blackwell, vol. 24(8), pages 745-761, August.
    21. Xinshu Zhao & John G. Lynch & Qimei Chen, 2010. "Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 37(2), pages 197-206, August.
    22. Alain Pinsonneault & Kenneth L. Kraemer, 2002. "Exploring the Role of Information Technology in Organizational Downsizing: A Tale of Two American Cities," Organization Science, INFORMS, vol. 13(2), pages 191-208, April.
    23. Fariborz Damanpour, 1996. "Organizational Complexity and Innovation: Developing and Testing Multiple Contingency Models," Management Science, INFORMS, vol. 42(5), pages 693-716, May.
    24. Anindita Chakravarty & Rajdeep Grewal & V. Sambamurthy, 2013. "Information Technology Competencies, Organizational Agility, and Firm Performance: Enabling and Facilitating Roles," Information Systems Research, INFORMS, vol. 24(4), pages 976-997, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ciampi, Francesco & Faraoni, Monica & Ballerini, Jacopo & Meli, Francesco, 2022. "The co-evolutionary relationship between digitalization and organizational agility: Ongoing debates, theoretical developments and future research perspectives," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    2. Adriana Grigorescu & Elena Pelinescu & Amalia Elena Ion & Monica Florica Dutcas, 2021. "Human Capital in Digital Economy: An Empirical Analysis of Central and Eastern European Countries from the European Union," Sustainability, MDPI, vol. 13(4), pages 1-21, February.
    3. Gao, Jing & Zhang, Wanfei & Guan, Tao & Feng, Qiuhong & Mardani, Abbas, 2023. "The effect of manufacturing agent heterogeneity on enterprise innovation performance and competitive advantage in the era of digital transformation," Journal of Business Research, Elsevier, vol. 155(PA).
    4. Zhihan Chen & Weilun Huang, 2023. "Evolutionary Game Analysis of Governmental Intervention in the Sustainable Mechanism of China’s Blue Finance," Sustainability, MDPI, vol. 15(9), pages 1-37, April.
    5. Vicente Ramos & Maurici Ruiz-Pérez & Bartomeu Alorda, 2021. "A Proposal for Assessing Digital Economy Spatial Readiness at Tourism Destinations," Sustainability, MDPI, vol. 13(19), pages 1-15, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nam, Dalwoo & Lee, Junyeong & Lee, Heeseok, 2019. "Business analytics use in CRM: A nomological net from IT competence to CRM performance," International Journal of Information Management, Elsevier, vol. 45(C), pages 233-245.
    2. Azmi, Anna & Sapiei, Noor Sharoja & Mustapha, Mohd Zulkhairi & Abdullah, Mazni, 2016. "SMEs' tax compliance costs and IT adoption: the case of a value-added tax," International Journal of Accounting Information Systems, Elsevier, vol. 23(C), pages 1-13.
    3. Teubner, Alexander & Stockhinger, Jan, 2020. "IT/IS strategy research and digitalization: An extensive literature review," ERCIS Working Papers 34, University of Münster, European Research Center for Information Systems (ERCIS).
    4. Maya Vachkova & Arsalan Ghouri & Haidy Ashour & Normalisa Binti Md Isa & Gregory Barnes, 2023. "Big data and predictive analytics and Malaysian micro-, small and medium businesses," SN Business & Economics, Springer, vol. 3(8), pages 1-28, August.
    5. Suoniemi, Samppa & Terho, Harri & Zablah, Alex & Olkkonen, Rami & Straub, Detmar W., 2021. "The impact of firm-level and project-level it capabilities on CRM system quality and organizational productivity," Journal of Business Research, Elsevier, vol. 127(C), pages 108-122.
    6. Jonghak Sun, 2017. "The effect of information technology on IT-facilitated coordination, IT-facilitated autonomy, and decision-makings at the individual level," Applied Economics, Taylor & Francis Journals, vol. 49(2), pages 138-155, January.
    7. Abhay Nath Mishra & Ritu Agarwal, 2010. "Technological Frames, Organizational Capabilities, and IT Use: An Empirical Investigation of Electronic Procurement," Information Systems Research, INFORMS, vol. 21(2), pages 249-270, June.
    8. Lingling Gao & Kerem Aksel Waechter, 0. "Examining the role of initial trust in user adoption of mobile payment services: an empirical investigation," Information Systems Frontiers, Springer, vol. 0, pages 1-24.
    9. Ciampi, Francesco & Faraoni, Monica & Ballerini, Jacopo & Meli, Francesco, 2022. "The co-evolutionary relationship between digitalization and organizational agility: Ongoing debates, theoretical developments and future research perspectives," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    10. Rui Bi & Robert M. Davison & Kosmas X. Smyrnios, 2017. "E-business and fast growth SMEs," Small Business Economics, Springer, vol. 48(3), pages 559-576, March.
    11. Morteza Ghobakhloo & Sai Hong Tang, 2015. "Information system success among manufacturing SMEs: case of developing countries," Information Technology for Development, Taylor & Francis Journals, vol. 21(4), pages 573-600, October.
    12. Lingling Gao & Kerem Aksel Waechter, 2017. "Examining the role of initial trust in user adoption of mobile payment services: an empirical investigation," Information Systems Frontiers, Springer, vol. 19(3), pages 525-548, June.
    13. Marius Stoffels & Jens Leker, 2018. "The Impact Of It Assets On Innovation Performance – The Mediating Role Of Developmental Culture And Absorptive Capacity," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(08), pages 1-21, December.
    14. YoungKi Park & Paul A. Pavlou & Nilesh Saraf, 2020. "Configurations for Achieving Organizational Ambidexterity with Digitization," Information Systems Research, INFORMS, vol. 31(4), pages 1376-1397, December.
    15. Siachou, Evangelia & Vrontis, Demetris & Trichina, Eleni, 2021. "Can traditional organizations be digitally transformed by themselves? The moderating role of absorptive capacity and strategic interdependence," Journal of Business Research, Elsevier, vol. 124(C), pages 408-421.
    16. Schubert, Torben & Ashouri, Sajad & Deschryvere, Matthias & Jäger, Angela & Visentin, Fabiana & Cunningham, Scott & Hajikhani, Arash & Pukelis, Lukas & Suominen, Arho, 2023. "The role of product digitization for productivity," MERIT Working Papers 2023-004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    17. Jean, Ruey Jer Bryan & Kim, Daekwan & Choi, Kyuyeong, 2021. "Pattern of information technology use and relationship learning in international customer-supplier relationships," International Business Review, Elsevier, vol. 30(4).
    18. Lin, Sheng-Wei, 2016. "The critical success factors for a travel application service provider evaluation and selection by travel intermediaries," Tourism Management, Elsevier, vol. 56(C), pages 126-141.
    19. Aboobucker Ilmudeen, 2022. "Leveraging IT-enabled dynamic capabilities to shape business process agility and firm innovative capability: moderating role of turbulent environment," Review of Managerial Science, Springer, vol. 16(8), pages 2341-2379, November.
    20. Fiona Maria Schweitzer & Matthias Handrich & Sven Heidenreich, 2019. "Digital Transformation In The New Product Development Process: The Role Of It-Enabled Plm Systems For Relational, Structural, And Npd Performance," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(07), pages 1-34, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:18:p:7374-:d:410690. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.