Changing the Competitive Landscape: Continuous Innovation Through IT-Enabled Knowledge Capabilities

We theoretically and empirically investigate the relationship between information technology (IT) and firm innovation. Invoking absorptive capacity (ACAP) theory, we introduce and develop the concepts of three types of IT-enabled knowledge capabilities. Firm innovation is examined through two observ...

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Bibliographic Details
Published inInformation systems research Vol. 21; no. 3; pp. 472 - 495
Main Authors Joshi, K. D., Chi, Lei, Datta, Avimanyu, Han, Shu
Format Journal Article
LanguageEnglish
Published Linthicum INFORMS 01.09.2010
The Institute for Operations Research and the Management Sciences (INFORMS)
Institute for Operations Research and the Management Sciences
Subjects
Absorptive capacity
Business innovation
Business structures
business value of IT
Competition
competitive impacts of IS
Correlation analysis
Expert systems
firm innovation
Information storage and retrieval systems
Information systems
Information technology
Innovations
Inventions
IT-enabled knowledge capability
Knowledge acquisition
Knowledge management
Market entry
Market shares
Modeling
Product development
Product innovation
Strategic management
strategic management of IT
Studies
Technological innovation
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Summary:We theoretically and empirically investigate the relationship between information technology (IT) and firm innovation. Invoking absorptive capacity (ACAP) theory, we introduce and develop the concepts of three types of IT-enabled knowledge capabilities. Firm innovation is examined through two observable innovation outcomes: patents, and new product and service introductions. These innovation outcomes are often labeled as competitive actions aggressively undertaken by firms to gain market share or to achieve profitability. We use secondary data about IT-enabled knowledge capabilities and innovation outcomes of 110 firms. Our data results provide strong support for our main assertion that knowledge capabilities that are enhanced through the use of IT contribute to firm innovation. The study's findings suggest that the three types of IT-enabled knowledge capabilities have differential effects on firm innovation. This study substantially contributes to the information systems (IS) research, methodology, and practice in multiple ways.
ISSN:1047-7047
1526-5536
DOI:10.1287/isre.1100.0298