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Information Technology Investment and Firm Performance in China and Korea: An Empirical Study  

Lee, Sang-Ho (College of Business Administration at Kyung Hee University)
Xiang, Jun Yong (School of Management at Tianjin University)
Kim, Jae-Kyeong (College of Business Administration and Management Research Institute at Kyung Hee University)
Publication Information
Information Systems Review / v.11, no.3, 2009 , pp. 169-189 More about this Journal
Abstract
Over the past three decades, the impact of information technology (IT) investments on firm performance has been the subject of active research. Despite increasing importance of research into the productivity of IT in developing countries, almost all findings on IT productivity have been based on data collected in developed countries. This study investigates the effects of IT investment on firms' financial performance in the insurance industry of Korea, which is OECD member and can be classified as a developed country in IT perspective, and in the electronics industry of China, which is a developing country, and compare them. The findings show that IT investment has a positive and significant impact on firm efficiency in both Korea and China, but a weakly positive impact on firm growth in only Korea. Moreover, the size of the impact on efficiency (ROA) in China is significantly larger than that in Korea.
Keywords
Information Technology Investment; Firm Performance; Productivity; China; Korea;
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