A Two-order Effect Model Of It Business Value: Theoretical Development And Empirical Test

Abstract

A new model for IT Business Value is proposed and empirically validated from longitudinal panel data. We posit that IT has a first-order effect that includes automating, and a second-order effect that is more dependent on informating. Our empirical results demonstrate that IT's contribution to firm performance is mediated via its impacts on productivity, which corresponds to the first-order effect. We further developed and validated a complex but parsimonious moderated-mediation model to show that these paths to business value from IT vary depending on industry information intensity, environmental dynamism, and environmental munificence.