This study seeks to shed light upon the strategic value of information technology (IT) investments. Previous literature suggests that IT investments per se are not sufficient for improving firm performance. Drawing from the resource-based view, it is hypothesized in this study that IT investments can deliver higher firm performance if they are 1) combined with complementary assets, 2) leveraged to build capabilities and 3) used to support organizational core competencies. Based on the data collected, the findings show that IT support for core competencies has a significant positive effect on firm performance and the research model explains more than fifty percent variation of this performance. The study contributes to the literature by developing a comprehensive resource-based model of IT value, which takes IT, human and complementary resources into account and combines them with IT-related capabilities. The study also attempts to fill the gap of measurement by proposing a new measurement for IT stock of company which accounts for both the availability and the level of information technologies held by the company. Lastly, the study provides evidence from an under researched country, Turkey.
KeywordsIT InvestmentsStrategic Value of ITResource-Based View
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