(The) impact of IT investment on firm performance with the moderating effect of CEOs characteristics, organizational capital and board characteristics

Abstract

This study aims to examine the effect of IT investment on firms’ financial performance, which can be explained by the resource-based view, and to examine the influence of moderators on the relationship, which we selected the key moderators under the group of corporate governance that can be explained in two perspective, the first one is to consider CEOs characteristics which are age, gender, tenure, managerial ability, and overconfidence as the moderating factors and the second one is considered on corporate perspective which are board-characteristics (e.g. board size, gender ratio and board independent) and organizational capital which is one of the key to indicate on how the firm invest in their other resource, the main theory are under the upper echelons theory and resource dependent theory. This is achieved by applying a fixed effect panel regression for the empirical analysis. Our findings indicate that IT investment has a positively significant effect on firms’ performance and CEOs’ managerial ability, overconfidence, Organizational Capital and Board Gender Diversity influenced to this relationship in a positive direction. This study provides supporting evidence for the resource-based view, upper echelons theory as well as resource dependent theory and it has practical implications for firms planning their strategies and management approaches.