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Shaping up for Performance Impacts of Information Technology: The Role of Corporate Governance
Joanna L. Y. Ho,
University of California Irvine
Anne Wu, National Chengchi University
Sean Xu, Hong Kong University of Science & Technology
ABSTRACT. Prior studies have reported mixed findings on the impact of corporate IT investment on firm performance. This study investigates the role of corporate governance, an important management control system, in the IT investment-firm performance relationship in the Taiwanese high-tech industries. Two specific corporate governance factors, i.e., board independence and foreign ownership, are explored across firms with different sizes and in industries whose degrees of competitiveness run a wide gamut. Our results show a strong effect of board independence on the IT investment-firm performance relationship, especially when competition intensifies. Furthermore, we find that the association between foreign ownership and firm performance is negative but not significant. Yet, foreign ownership is a significant moderator for small firms, suggesting that foreign investors may bring IT expertise to help small firms reap the benefits of using IT.
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