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Complementarity Between Investment in Information Technology (IT) and IT Human Resources: Implications for Different Types of Firm Innovation

Author

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  • Feng Guo

    (Department of Accounting, Debbie and Jerry Ivey College of Business, Iowa State University, Ames, Iowa 50011)

  • Yijun Li

    (Department of Business Economics, Erasmus School of Economics, Erasmus University Rotterdam, 3062 PA Rotterdam, Netherlands)

  • Likoebe M. Maruping

    (Computer Information Systems Department, Center for Digital Innovation, J. Mack Robinson College of Business, Georgia State University, Atlanta, Georgia 30303)

  • Adi Masli

    (Department of Accounting, School of Business, University of Kansas, Lawrence, Kansas 66045)

Abstract

It is well acknowledged in the information systems (IS) literature that information technology (IT) plays an important role in firm innovation. A small but growing body of empirical evidence points to the importance of IT employees as an important complementary resource, particularly for IT-related innovation. However, there is an open question as to whether investment in such resources is complementary across a range of innovation types. This research note aims to provide theoretical and empirical clarity by emphasizing the complementary nature of firm investment in IT and in IT human resources (HR) in affecting firm innovation performance across four types of innovation: incremental, radical, non-IT related and IT related. Drawing on the theory of complementarities and theorizing about the operand and operant nature of resources, we argue that firm investment in IT HR enables firms to gain additional innovation value from their IT investments and vice versa. Using a sample involving 36,812 firm-year observations, we find that firms with robust investments in IT and in IT human resources produce more patents with greater value. Furthermore, we find that such firms produce more patents that emphasize new knowledge and those that build on existing knowledge. Finally, we find that this complementarity promotes IT-related and non–IT-related innovation. A series of analyses demonstrate the robustness of these results. We discuss implications for theory and practice.

Suggested Citation

  • Feng Guo & Yijun Li & Likoebe M. Maruping & Adi Masli, 2023. "Complementarity Between Investment in Information Technology (IT) and IT Human Resources: Implications for Different Types of Firm Innovation," Information Systems Research, INFORMS, vol. 34(3), pages 1259-1275, September.
    • Handle: RePEc:inm:orisre:v:34:y:2023:i:3:p:1259-1275
    DOI: 10.1287/isre.2022.1185
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