IDEAS home Printed from https://ideas.repec.org/a/taf/tjisxx/v31y2022i2p145-165.html
   My bibliography  Save this article

Exploring firm strategy using financial reports: performance impact of inward and outward relatedness with digitisation

Author

Listed:
  • Wael Jabr
  • Zhiqiang (Eric) Zheng

Abstract

A firm’s success critically hinges on its strategies in selecting its portfolio of products and services. In this paper, we study how differentiation and market alignment at the offering level impact firm performance. To that end, we mine firms’ 10-K filings to characterise the portfolio of offerings through the lens of outward relatedness, inward relatedness, and digitisation. We define outward relatedness as a measure of alignment of firm offerings within its market space, inward relatedness as a measure of differentiation of firm offerings with its own past offerings, and digitisation as a measure of the firm’s focus on IT. We find that markets react positively to firms that operate with high levels of outward relatedness, low levels of inward relatedness and high levels of digitisation. However, we find that highly digitised firms do not have to conform to peers’ offerings. Digitisation enables these firms to differentiate by internally diversifying their offerings. Interestingly, our results show that only firms already highly digitised benefit from further digitisation.

Suggested Citation

  • Wael Jabr & Zhiqiang (Eric) Zheng, 2022. "Exploring firm strategy using financial reports: performance impact of inward and outward relatedness with digitisation," European Journal of Information Systems, Taylor & Francis Journals, vol. 31(2), pages 145-165, March.
    • Handle: RePEc:taf:tjisxx:v:31:y:2022:i:2:p:145-165
    DOI: 10.1080/0960085X.2020.1829511
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/0960085X.2020.1829511
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/0960085X.2020.1829511?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    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:taf:tjisxx:v:31:y:2022:i:2:p:145-165. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/tjis .

    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.