Relationship among Information Technology Investment, Firm Performance, Innovation and Firm Growth, Case Study: Largest Iranian Manufacturers
Abstract
Information technology is the main item for improve the firm performance for organizations. On the basis of the resourcebased
view, this paper investigates relationship between Information Technology (IT) investments and firm performance. The
research assesses whether innovation is moderated by firm growth and this study investigated the mediation effects of
innovation on IT’s impact on firm performance. A set of hypotheses rooted in the resource-based view theories of the firm
was created and empirically tested. Survey email invitation approach was employed to send a letter of invitation to 1,100
potential participants at 300 firms to participate in the study. To analyze the data, both mediated regression and hierarchical
linear regression models were utilized; and following controlling for firm growth. The results of this study indicate that IT
increases the innovation of the firm. Innovation improves firm performance in terms of financial and operational. Results also
indicate that IT’s impact on innovation is significantly moderated by firm growth. Finally, the results indicate that IT’s
impact on firm performance is through innovation. This suggests that firms should consider IT investments that improve the
firm’s capabilities in order to achieve a significant impact on firm performance. The main purpose of this paper is to offer the
new perspectives in illumination how IT can create a sustained competitive advantage for the firm.