Industry and firm effects on IT diffusion processes: firm-level evidence in Italian enterprises

Abstract

This article examines the antecedents and performance consequences of capabilities developed from the use of information technology (IT) in a sample of 186 Italian large enterprises. Attention is given to the influence of industry and firm characteristics on the creation of capabilities and on the returns from IT investments. Our work makes three principal contributions. First, the IT diffusion patterns reveal that these technologies have a dual nature. Some capabilities derived from IT use (i.e., administrative capabilities) diffuse evenly across industries because the underlying technologies easily adapt to industry- and firm-specific conditions. In contrast, the use of IT in supporting other capabilities (such as those related to product development) is less developed and more concentrated in the high-tech and information service sectors. Second, using a resource-based perspective, this articles shows the positive effects that firm-specific preconditions have on the accumulation of IT resources and capabilities that exhibit a rare diffusion at the industry level. Third, given industry-level differences in competitive environments, we show how the value appropriation of capabilities that firms have developed using IT depends on industry type, with hi-tech and information services industries exhibiting lower profit returns.