IT investment and corporate performance: Evidence from Malaysia

• Published in: Cogent business & management Vol. 9; no. 1; pp. 1 - 13
• Main Authors: Alghorbany, Abdelkader, Che-Ahmad, Ayoib, Abdulmalik, Salau Olarinoye
• Format: Journal Article
• Language: English
• Published: Abingdon Taylor & Francis 31.12.2022; Cogent; Taylor & Francis Ltd; Taylor & Francis Group
• Subjects: Capital investments; Correlation analysis; equity value multiple; Financial performance; Generalized method of moments; Information technology; Malaysia
• ISSN: 2331-1975; 2331-1975
• DOI: 10.1080/23311975.2022.2055906

This paper aims to investigate the effect of Information Technology (IT) investment on firm performance in Malaysia. The data of this study were collected from 231 firms listed on Bursa Malaysia from 2010 to 2019. A dynamic model was built, and estimation was carried out by using the Generalized Method of Moments (GMM) that controls the endogeneity nature of the equity value multiple model. As predicted, IT investment incurred in the current study displayed a positive but weakly significant impact upon firm performance. This result provides valuable information for investors, stakeholders, and the public in general and encourages the companies to implement IT to its benefit in improving the firms' performance. Thus, the findings confirm the significance of future studies that could suggest other variables to further understand whether they support or oppose managerial opportunism to enhance the relationship. Consistent with this suggestion, the result of the present study could help researchers and practitioners identify the key factors to making the right IT investment decision.