How Firms Make Information Technology Investment Decisions: Toward a Behavioral Agency Theory

• 成果类型: Article
• 署名作者: Dong, John Qi; Karhade, Prasanna P.; Rai, Arun; Xu, Sean Xin
• 署名单位: Trinity College Dublin; University of Hawaii System; University of Hawaii Manoa; University System of Georgia; Georgia State University; University System of Georgia; Georgia State University; Tsinghua University
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.1080/07421222.2021.1870382
• 发表日期: 2021
• 页码: 29-58
• 关键词: research-and-development; corporate governance; financial performance; absorptive-capacity; ceo compensation; business value; risk-taking; search; INNOVATION; systems

摘要

While prior research has established that information technology (IT) investment has a significant impact on firm performance, relatively few studies have provided insights into the antecedents of IT investment decisions. By integrating the behavioral theory of the firm and agency theory, we propose a behavioral agency theory to explain performance shortfalls and corporate governance, which monitors and controls managers' tendency of overinvestment or underinvestment in IT, as key drivers that jointly determine IT investment. As such, IT investment facilitates a firm's problemistic search that generates innovation in response to performance gaps. We further examine the role of innovation outputs as a mediating mechanism linking IT investment to firm performance. Our econometric analysis of a large-scale panel dataset provides empirical evidence corroborating our theory. Overall, this study contributes a behavioral agency theory to deepen our understanding about performance drivers and outcomes of IT investment decisions.