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A new look at returns of information technology: firms’ diversification to IT service market and firm value

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Abstract

Firms that are traditionally not in the scope of IT increasingly develop IT services as new business lines to create better customer offering portfolios. The current research takes the first step to theoretically explore and empirically examine how these firms’ diversification to IT services may affect their performance as reflected in firm value. Furthermore, these relationships are modeled into three key interactions with firm size, firm age, and firm service intensity, to decode the differential roles of this diversification strategy on firm shareholder welfare in the varying scenarios along with the moderators. This research generates implications for theories such as IT and knowledge management, resource-based theories, and it provides practical implications for business managers.

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Authors and Affiliations

  1. Helzberg School of Management, Rockhurst University, 1100 Rockhurst Road, Kansas City, MO, USA

    Wenbin Sun

  2. School of Management, China University of Mining and Technology, Xuzhou, Jiangsu, China

    Zhihua Ding

  3. International Business School, Xi’an Jiaotong-Liverpool University, Suzhou, China

    Xiaobo Xu

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  1. Wenbin Sun
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Sun, W., Ding, Z. & Xu, X. A new look at returns of information technology: firms’ diversification to IT service market and firm value. Inf Technol Manag 22, 13–31 (2021). https://doi.org/10.1007/s10799-021-00322-y

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