Information and Communication Technology Adoption Strategies of Emerging Multinationals From India

Arindam Mondal,Amit Baran Chakrabarti

doi:10.4018/jgim.20210901.oa9

Abstract

The growth and rising prominence of multinationals from emerging markets (eMNCs) mark a significant phase in the evolution of the world economy in the last decade. This study investigates the effect of eMNCs' institutional embeddedness in terms of age on the adoption strategy of new and emerging information and communication technologies (ICT). Using panel multiple regression on a unique database of 3,756 observations from 394 Indian eMNCs in period of 2009 to 2019, the authors find that firm age has a unique negative impact on ICT investments of eMNCs. However, ownership is able to influence the negative impact of age in unique ways. Business group affiliation attenuates the impact of firm age on ICT investments, such that the reduction in ICT investments with firm age is less for BG-affiliated firms. Meanwhile, the higher the foreign institutional ownership in eMNCs, the lower the impact of firm age on ICT investments.

Highlights

Whether firms can improve performance by allocating financial resources for information and communication technology (ICT) is an important question in strategic management and information systems literature (Porter, 2001; Kohli & Devaraj, 2003; Melville, Kraemer, & Gurbaxani, 2004; Teece, 2007)
Business group affiliation attenuates the impact of firm age on information and communication technologies (ICT) investments, such that the reduction in ICT investments with firm age is less for BG-affiliated firms
The dependent variables are regressed against the independent and control variables to ensure that the direction of causality is from firm age to ICT investments and not the reverse

Summary

Introduction

Whether firms can improve performance by allocating financial resources for information and communication technology (ICT) is an important question in strategic management and information systems literature (Porter, 2001; Kohli & Devaraj, 2003; Melville, Kraemer, & Gurbaxani, 2004; Teece, 2007). The remarkable performance of BAT (standing for Baidu, Alibaba and Tencent), epitomizes the rapid transformation of the Chinese technology sector from mere imitator to innovator (Demirkan, Yang, & Jiang, 2019). Such attention is warranted because eMNCs face unique institutional conditions in their home environment and have resource limitations, which can affect how substantively they adopt these new and emerging ICT technologies in their business models

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Conclusion