Effect of use of information technology on innovation capability, competitiveness, and firm performance: Case of manufacturing industry in South Sulawesi

Abstract

This study aimed to investigate the effect of information technology on innovation capability, competitiveness, and firm performance. To examines the impact of innovation capability on competitiveness, and firm performance. To examines the effect of competitiveness on firm performance. The population of this study was some medium and large-scale manufacturing companies in Makassar City and Gowa Regency, South Sulawesi Province in Indonesia. The number of samples was 160 units of manufacturing companies. Method of analysis used descriptive analysis and structural equation modeling analysis. The results showed that the use of information technology has a direct and positive effect on innovation capability, competitiveness, and firm performance. Innovation capability has a direct and positive effect on competitiveness, and firm performance. Competitiveness has a positive effect on firm performance. Also, firm performance can be improved directly through the use of information technology, innovation capability, and competitiveness. The firm performance can be increased indirectly through improvements some indicators of innovation capability variable, and competitiveness.