Business Value of Information Technology: Testing the Interaction Effect of IT and R&D on Tobin's Q

• 成果类型: Article
• 署名作者: Bardhan, Indranil; Krishnan, Viswanathan; Lin, Shu
• 署名单位: University of Texas System; University of Texas Dallas; University of California System; University of California San Diego; California State University System; California State University Fresno
• 刊物名称: INFORMATION SYSTEMS RESEARCH
• ISSN/ISSBN: 1047-7047
• DOI: 10.1287/isre.2013.0481
• 发表日期: 2013
• 页码: 1147-1161
• 关键词: market value; firm; PRODUCTIVITY; performance; INNOVATION; INVESTMENT; KNOWLEDGE; profitability; capabilities; spillovers

摘要

The business case for investing in information technology (IT) has received increasing scrutiny in recent years. We propose that IT investments create additional business value through interactions with other business processes. In this paper, we formalize the interaction effect of IT by focusing on one core function, namely, research and development (R&D). We hypothesize that investments in IT can interact with and complement a firm's R&D investments, enhancing the firm's shareholder value creation potential. We test this by hypothesis by estimating the interaction impact of IT and R&D investments on Tobin's q, a forward-looking measure of firm performance using a recent multiyear, firm-level, archival data set. Our results suggest that the interaction effect of R&D and IT on Tobin's q is positive and significant after controlling for other firm-and industry-specific effects. Our findings provide rigorous empirical support for recent anecdotal evidence in the managerial literature with respect to the manner in which IT is enabling R&D-intensive innovation processes. Our analysis underscores the need for coordinated investments in IT and R&D, and permeating IT capabilities throughout other business processes such as R&D.