Differential effects of IT investments: Complementarity and effect of GDP level

Authors:
Yong Jin Kim;Hyunjeong Kang;G. Lawrence Sanders;Sang-Yong Tom Lee
Affiliations:
School of Business Administration, Sogang University, Seoul 121-742, Republic of Korea;Samsung Economic Research Institute, Seoul 140-702, Republic of Korea;School of Management, University at Buffalo (SUNY), Buffalo, NY 14260, USA;College of Information and Communications, Hanyang University, Seoul 133-791, Republic of Korea
Venue:
International Journal of Information Management: The Journal for Information Professionals
Year:
2008

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Abstract

With the rapid growth of Information Technology (IT) investments, the issue of measuring the business value or impact of IT investments has received increased attention from both academia and practitioners. However, the empirical results of the studies regarding the value of IT investments are inconclusive. This paper uses the knowledge management and resource-based perspective, to examine how the three areas of IT investment-hardware, software, and internal spending affect GDP in terms of complementarity and GDP level. The results indicate that software investment is important and contributes to improving the gross domestic products and to maximizing the utilization of the hardware investment. The study also found that the complementarity between the three types of IT has a differential effect on GDP according to GDP level. Further results and implications are discussed.