A microeconomic approach to the measurement of information technology value
Journal of Management Information Systems
The productivity paradox of information technology
Communications of the ACM
Does information technology lead to smaller firms?
Management Science
Technology investment and business performance
Communications of the ACM
Corporate Information Systems Management: The Issues Facing Senior Executives
Corporate Information Systems Management: The Issues Facing Senior Executives
Analyzing cost-effectiveness of organizations: the impact of information technology spending
Journal of Management Information Systems - Special section: Strategic and competitive information systems
Measuring the organizational impact of information technology investment: an exploratory study
Journal of Management Information Systems - Special section: Realizing value from information technology investment
Information Technology Investments and Firms' Performance--A Duopoly Perspective
Journal of Management Information Systems
Special Section: Measuring Business Value of Information Technology in E-Business Environments
Journal of Management Information Systems
International Journal of Electronic Commerce
International Journal of Electronic Commerce
Evaluating the impact of IT investments on productivity: a causal analysis at industry level
International Journal of Information Management: The Journal for Information Professionals
Information Resources Management Journal
A Lag Effect of IT Investment on Firm Performance
Information Resources Management Journal
The Institutionalization of IT Budgeting: Empirical Evidence from the Financial Sector
Information Resources Management Journal
Improvement in Operational Efficiency Due to ERP Systems Implementation: Truth or Myth?
Information Resources Management Journal
Information Resources Management Journal
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The promise of increased competitive advantage has been the driving force behind the large-scale investment in information technology IT over the last three decades. There is a continuing debate among executives and academics as to the measurable benefits of this investment. The return on investment ROI and other performance measures reported in the academic literature indicate conflicting empirical findings. Many previous studies have based their conclusions on the statistical correlation between IT capital investment and firm performance data of the same time period. In this study we argue that the causal relationship between IT investment and firm performance could not be reliably established through concurrent IT and performance data. We further submit that it would be more convincing to infer causality if the IT investments in the preceding years are significantly correlated with the performance of a firm in the subsequent year. Using the Granger causality models and three samples of firm level financial data, we found no statistical evidence that IT investments have caused the improvement of financial performance of the firms in the samples. On the contrary, the causal models suggest that improved financial performance over consecutive years may have contributed to the increase of IT investment in the subsequent year. Implications of these findings, as well as directions for future studies, are discussed.