Contingencies in Value Creation from Digitization of Services: Evidence from Credit Union Industry

Abstract

The effects of digitized services on the performance of service organizations remain understudied. This study explores contingencies in which digitized services influence the performance of credit unions – an exemplar of service-oriented firms. We investigate contingent effects of digitized B2B transactions (DBT), digitized customer access (DCA), and digitization of banking services (DBS), on credit union performance. We theorize positive moderation effects of DBT and DCA on the relationship between DBS and performance. In addition, we argue that advertising investment complements the moderating role of DCA on the relationship between DBS and performance. Likewise, we posit that inter-organizational financial system (IOFS) participation enhances the moderating role of DBT on the relationship between DBS and performance. Our empirical analysis of archival data from annual reports and publicly available information of credit unions across the United States largely supports our theoretical model. Overall, the study uncovers contingencies in the link between digitization of services and firm performance, and demonstrates how investment strategies influence these relationships.