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Information technology capability and value creation: Evidence from the US banking industry

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  • Lin, Bou-Wen

Abstract

This paper investigates whether the firm Information technology (IT) capability of a firm can create economic value and competitive advantage. In contrast to past research, which generally assumed that IT investment leads to IT capability that in turn leads to competitive advantage, this study examines IT capability directly. Based on a cross-sectional sample of 155 banking firms, I investigated the main and interactive effects of IT capability and human capital investment on five firm-performance measures. The results of this study indicate that both IT capability and human capital investment contribute directly to the overall value-creation performance of banking firms. Further, the study suggests that IT capability and human capital investment can have a negative interactive effect on the firm's value creation. A firm's IT capability should be seen as an integral tool for creating economic value instead of a business infrastructure that makes business operations efficient. The results of this study support the resource-based view of the firm.

Suggested Citation

  • Lin, Bou-Wen, 2007. "Information technology capability and value creation: Evidence from the US banking industry," Technology in Society, Elsevier, vol. 29(1), pages 93-106.
    • Handle: RePEc:eee:teinso:v:29:y:2007:i:1:p:93-106
    DOI: 10.1016/j.techsoc.2006.10.003
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    Cited by:

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    2. Tânia Cristina CHIARELLO & Caroline Sulzbach PLETSCH & Alini DA SILVA & Tarcísio Pedro DA SILVA, 2014. "Financial Performance, Intangible Assets And Value Creation Of Brazilian And Chilian Companies Of Information Technology," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 23(4), pages 73-88.
    3. Turhan Erkmen & Ayşe Günsel & Erkut Altındağ, 2020. "The Role of Innovative Climate in the Relationship between Sustainable IT Capability and Firm Performance," Sustainability, MDPI, vol. 12(10), pages 1-26, May.
    4. Daria Ciriaci, 2017. "Intangible resources: the relevance of training for European firms’ innovative performance," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(1), pages 31-54, April.
    5. Chatterjee, Sheshadri & Chaudhuri, Ranjan & Mariani, Marcello & Fosso Wamba, Samuel, 2023. "Examining the role of intellectual capital on knowledge sharing in digital platform-based MNEs and its impact on firm performance," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    6. Daniel D. Dasig, Jr. & Ma. Corazon Benosa & Alexander B.Pahayahay & Nelson R. Asejo & Cecilia Tadeo & Mary Ellainecervantes & Michael Mansueto & Lilibeth Arcalas & Danilo C. Sabado, 2017. "Glocalization of Technology Capability in these TechnologicalConstellations," International Journal of Business and Economic Affairs (IJBEA), Sana N. Maswadeh, vol. 2(2), pages 106-115.
    7. Sani Ibrahim, Mr. Saifullahi & Muhammad, Mr. Abubakar, 2013. "Information and Communication Technology and Bank Performance in Nigeria: A Panel Data Analysis," MPRA Paper 49062, University Library of Munich, Germany.
    8. Daria Ciriaci, 2011. "Intangible resources: the relevance of training for European firms innovative performance," JRC Working Papers on Corporate R&D and Innovation 2011-06, Joint Research Centre.
    9. Rogo, Francesco & Cricelli, Livio & Grimaldi, Michele, 2014. "Assessing the performance of open innovation practices: A case study of a community of innovation," Technology in Society, Elsevier, vol. 38(C), pages 60-80.
    10. Wamba, Samuel Fosso & Gunasekaran, Angappa & Akter, Shahriar & Ren, Steven Ji-fan & Dubey, Rameshwar & Childe, Stephen J., 2017. "Big data analytics and firm performance: Effects of dynamic capabilities," Journal of Business Research, Elsevier, vol. 70(C), pages 356-365.
    11. Payam Hanafizadeh & Mojdeh Gerami Amin, 2023. "The transformative potential of banking service domains with the emergence of FinTechs," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(3), pages 411-447, September.
    12. Ayaz Ahmad & Salniza Md. Salleh & Selvan a/l Perumal, 2018. "Information Technology, Marketing Database and the Process of Integrated Marketing Communications (IMC): A Resource-Capability Nexus," Pakistan Journal of Humanities and Social Sciences, International Research Alliance for Sustainable Development (iRASD), vol. 6(4), pages :544-560, December.

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