Browse > Article
http://dx.doi.org/10.9723/jksiis.2019.24.3.001

Investigating the Relationships Among Inventory Turnover Performance, IT, and Firm and Industry Characteristics  

Kim, Gilwhan (계명대학교 경영학과)
Publication Information
Journal of Korea Society of Industrial Information Systems / v.24, no.3, 2019 , pp. 1-21 More about this Journal
Abstract
The objective of this study is three-fold: to investigate the relationship between information technology (IT) investment and inventory turnover, using 98 U.S. firms spanning eleven years (from 1999 to 2009); to analyze the correlation of inventory turnover with firm and industry characteristics, where vertical integration and growth options are chosen to reflect the features of the firm's internal characteristics, and industry dynamism and industry concentration are selected to represent the industry's competitive environment; and to examine time trends in inventory turnover. The significant findings include the following: (i) both IT investment and growth options have a positive impact on inventory turnover; (ii), but vertical integration and industry concentration have a negative impact on inventory turnover; (iii) the impact of industry dynamism on inventory turnover positive; and (iv) the time trends in inventory turnover and 'adjusted inventory turnover' have been increased during the sample period from 1999 to 2009.
Keywords
Information technology; Inventory turnover; Vertical integration; Growth options; Industry dynamism; Industry concentration;
Citations & Related Records
Times Cited By KSCI : 2  (Citation Analysis)
연도 인용수 순위
1 Andreyeva, T., Long, M,W., and Browenll, K,D., "The impact of food prices on consumption: a systemetics review of research on the price Elasticity of demand for food," American Journal of Public Health, Vol. 100, No. 2, pp. 216-222, 2010   DOI
2 Barua, A., Kriebel, C. H., and Mukhopadhyay, T., “Information technologies and business value: An analytic and empirical investigation,” Information Systems Research, Vol. 6, No. 1, pp. 3-23, 1995.   DOI
3 Bender, D. H., "Financial impact of information processing," Journal of Management Information Systems, Vol. 3, No. 2, pp. 22-32, 1986   DOI
4 Bergh, D. D., “Product-market uncertainty, portfolio restructuring, and performance: An information processing and resource-based view,” Journal of Management, Vol. 24, No. 2, pp. 135-155, 1998.   DOI
5 Bharadwaj, A. S., Bharadwaj, S. G., and Konsynski, B. R., “Information technology effects on firm performance as measured by Tobin's q,” Management Science, Vol. 45, No. 7, pp. 1008-1024, 1999.   DOI
6 Cachon, G. P. and Olivares, M., “Drivers of finished-goods inventory in the US automobile industry,” Management Science, Vol. 56, No. 1, pp. 202-216, 2010.   DOI
7 Cannon, A. R., “Inventory improvement and financial performance,” International Journal of Production Economics, Vol. 115, No. 92, pp. 581-593, 2008.   DOI
8 Cao, C., Simin, T,, and Zhao, J., "Can growth options explain the trend in idiosyncratic risk?," Review of Financial Studies Vol. 21, No. 6, pp,2599-2633, 2008.   DOI
9 Capkun, V., Hameri, A. P., and Weiss, L. A. Weiss., “On the relationship between inventory and financial performance in manufacturing companies,” International Journal of Operations & Production Management, Vol. 29, No. 8, pp. 789-806, 2009.   DOI
10 Chari, M. D., Devaraj, S., and David, P., “Research note-the impact of information technology investments and diversification strategies on firm performance,” Management Science, Vol. 54, No. 1, pp. 224-234, 2008.   DOI
11 Chen, H., Frank, M. Z., and Wu, O. Q., "What actually happened to the inventories of American companies between 1981 and 2000?" Management Science, Vol. 51, No. 7, pp. 1015-1031, 2005.   DOI
12 Chen, H., Frank, M. Z., and Wu, O. Q., “US retail and wholesale inventory performance from 1981 to 2004,” Manufacturing & Service Operations Management, Vol. 9, No. 4, pp. 430-456, 2007.   DOI
13 Choi, H. R., Park, B. J., Shin, J. J., and Keceli, Y., “Development of the automated gate system based on RFID/OCR in a container terminal,” Journal of the Korea Industrial Information Society, Vol. 12, No. 2, pp. 37-48, 2007.
14 Cron, W. L. and Sobol, M. G., “The relationship between computerization and performance: a strategy for maximizing the economic benefits of computerization,” Information & Management, Vol. 6, No. 3, pp. 171-181, 1983.   DOI
15 Dehgani, R., ""The impact of information technology and communication systems on the agility of supply chain management systems," https://doi.org/10.1108/K-10-2018-0532, 2019.
16 Dess, G. G. and Beard, D. W., “Dimensions of organizational task environments,” Administrative Science Quarterly, Vol. 29, No. 1, pp. 52-73, 1984.   DOI
17 Dewan, S., Michael, S. C., and Min, C.K., “Firm characteristics and investments in information technology: Scale and scope effects,” Information Systems Research, Vol. 9, No. 3, pp. 219-232, 1998.   DOI
18 Lin, W. T. and Shao, B., “The business value of information technology and inputs substitution: the productivity paradox revisited,” Decision Support Systems, Vol. 42, No. 2, pp. 493-507, 2006.   DOI
19 Lee, H., Padamanabhan, P., and Whang, S., “Information distortion in supply chain: the bullwhip effect,” Management Science, Vol. 43, No. 4, pp. 546-558, 1997.   DOI
20 Lee, H. H., Zhou, J., and Hsu, P. H., "The role of innovation in inventory turnover performance," Decision Support Systems, Vol. 76, pp. 35-44, 2015.   DOI
21 Lin, W. T. and Chiang, C. Y., “The impacts of country characteristics upon the value of information technology as measured by productive efficiency,” International Journal of Production Economics, Vol. 132, No. 1, pp. 13-33, 2011.   DOI
22 Frohlich, M. T. and Westbrook, R., “Demand chain management in manufacturing and services: web-based integration, drivers and performance,” Journal of Operations Management, Vol. 20, No. 66, pp. 729-745, 2002.   DOI
23 Economic Report of the President., "The annual report of the council of economic advisors. In The Economics of the President," U.S. Government Printing Office, Washington, D.C, 2001.
24 Eroglu, C. and Hofer, C., “Lean, leaner, too lean? The inventory-performance link revisited,” Journal of Operations Management, Vol. 29, No. 44, pp. 356-369, 2001.   DOI
25 Fan, T., Tao, F., Deng, S. and Li, S., "Impact of RFID technology on supply chain decisions with inventory inaccuracies," International Journal of Production Economics, Vol. 159, pp. 117-125, 2015.   DOI
26 Mishra, S., Modi, S.B., and Animesh, A., “The relationship between information technology capability, inventory efficiency, and shareholder wealth: A firm-level empirical analysis,” Journal of Operation. Management, Vol. 31, No. 1, pp. 298-312, 2013.   DOI
27 Lin, W. T. and Zhao, N., "Measuring and comparing the performance of U.S. manufacturing and service operations in the presence of information technology," Working paper, 2015..
28 Mason, E. S., “Price and production policies of large-scale enterprise,” The American Economic Review, Vol. 29, No. 1, pp. 61-74, 1939.
29 Melville, N., Gurbaxani, V., and Kraemer, K., “The productivity impact of information technology across competitive regimes: The role of industry concentration and dynamism,” Decision Support Systems, Vol. 43, No. 1, pp. 229-242, 2007.   DOI
30 Mukhopadhyay, T., Kekre, S., and Kalathur, S., “Business value of information technology: a study of electronic data interchange,” MIS Quarterly, Vol. 19, No. 2, pp. 137-156, 1995.   DOI
31 Grossman, G and Helpman, E., “Quality ladders and product cycles,” The Quarterly Journal of Economics, Vol. 106, No. 2, pp. 557-586, 1991.   DOI
32 Gaur, V., Fisher, M. L., and Raman, A., “An econometric analysis of inventory turnover performance in retail services,” Management Science, Vol. 51, No. 2, pp. 181-194, 2005.   DOI
33 Gaur, V. and Kesavan, S., "The effects of firm size and sales growth rate on inventory turnover performance in the U.S. retail sector," In Retail Supply Chain Management, Springer, pp. 25-52, 2015.
34 Greenspan, A., "Maintaining Economic Volatility. Federal Reserve Board," Remarks in the Millennium Lecture Series, 1999.
35 Gurbaxani, V., and Whang, S., “The impact of information systems on organizations and markets,” Communications of the ACM, Vol. 34, No. 1, pp. 9-73, 1991.
36 Hancerliogullari, G., Sen, A., and Aktunc, E.A., “Demand uncertainty and inventory turnover performance: An empirical analysis of the US retail industry,” International Journal of Physical Distribution and Logistics Management, Vol. 46, No. 6, pp. 681-708, 2016.   DOI
37 Hausman, J. A. and Taylor, W. E., “Panel data and unobservable individual effects,” Econometrica, Vol. 49, No. 6, pp. 1377-1398, 1981.   DOI
38 Floyd, S. W. and Wooldridge., B., “Path analysis of the relationship between competitive strategy, information technology, and financial performance,” Journal of Management Information Systems, Vol. 7, No. 1, pp. 47-64, 1990.   DOI
39 Hawawini, G., Subramanian, V., and Verdin, P., “Is performance driven by industry or firm specific factors? A new look at the evidence,” Strategic Management Journal, Vol. 24, No. 1, pp. 1-16, 2003.   DOI
40 Olivares, M. and Cachon, G. P., “Competing retailers and inventory: An empirical investigation of General Motors' dealerships in isolated US markets,” Management Science, Vol. 55, No. 9, pp. 1586-1604, 2009.   DOI
41 Rabinovich, E., Dresner, M. E., and Evers, P.T., “Assessing the effects of operational processes and information systems on inventory performance,” Journal of Operations Management, Vol. 21, No. 1, pp. 63-80, 2003.   DOI
42 Rajagopalan, S. and Malhotra, A., “Have US manufacturing inventories really decreased? An empirical study,” Manufacturing & Service Operations Management, Vol. 3, No. 1, pp. 14-24, 2001.   DOI
43 Shah, R. and Shin, H., “Relationships among information technology, inventory, and profitability: an investigation of level invariance using sector level data,” Journal of Operations Management, Vol. 25, No. 4, pp. 768-784, 2007.   DOI
44 Rumyantsev, S. and Netessine, S., “What can be learned from classical inventory models? A cross industry exploratory investigation,” Manufacturing & Service Operations Management, Vol. 9, No. 4, pp. 409-429, 2007.   DOI
45 Sambamurthy, V., Bharadwaj, A., and Grover, V., “Shaping agility through digital options: re-conceptualizing the role of information technology in contemporary firms,” MIS Quarterly, Vol. 27, No. 2, pp. 237263, 2003.
46 Scherer, F. M., and Ross, D., "Industrial market structure and economic performance," University of Illinois at Urbana-Champaign's Academy for entrepreneurial leadership historical research reference in entrepreneurship, 1990.
47 Sullivan, M, W., “How brand names affect the demand for two automobiles,” Journal of Marketing Research, Vol. 35, No. 2, pp. 54-65, 1998.   DOI
48 Varian, H. R, Microeconomic Analysis (Vol. 2). New York: Norton, 1992.
49 Hitt, L. M. and Brynjolfsson, E., “Productivity, business profitability, and consumer surplus: three different measures of information technology value,” MIS Quarterly, Vol. 20, No. 2, pp. 121-142, 1996.   DOI
50 Hill, C. W. and Hoskisson, R. E., “Strategy and structure in the multiproduct firm,” Academy of Management Review, Vol. 12, No. 2, pp. 331-341, 1987.   DOI
51 Imrohoroglu, A. and Tuzel, S., "Firm-level productivity, risk, and return," Management Science, Vol. 60, No. 8, pp. 2973-2009, 2014.   DOI
52 Jorgenson, D. W., “Information technology and the US economy,” The American Economic Review, Vol. 91, No. 1, pp. 1-32, 2001.   DOI
53 Jung, Y S., “A study on the manufacturing performance with ERP Systems,” Journal of the Korea Industrial Information Society, Vol. 6, No. 4, pp. 30-38, 2001.
54 Keats, B. W. and Hitt, M. A., “A causal model of linkages among environmental dimensions, macro organizational characteristics, and performance,” Academy of management Journal, Vol. 31, No. 3, pp. 570-598, 1988.   DOI
55 Kim, B., Na, J., and Kim, S., "Effects of target firm's inventory turnover on post-merger and acquisition performance," International Journal of Applied Management Science, Vol. 10, Issues. 3, DOI: 10.1504/IJAMS.2018.093800, 2018.
56 Kim, G., Lin, W. T., and Simpson, N., “Evaluating the performance of U.S. manufacturing and service operations in the presence of IT: a Bayesian stochastic production frontier approach,” International Journal of Production Research, Vol. 53, No. 18, pp. 5500-5523, 2015.   DOI
57 Kim, J. J., Cho, K. C., and Kim, J. W., “Medical information processing system based on wireless network using RFID,” Journal of the Korea Industrial Information Society, Vol. 11, No. 4, pp. 1-9, 2006.
58 Wan, X. and Sanders, N.R., "The negative impact of product variety: forecast bias, inventory levels, and the role of vertical integration," International Journal of Production Economics, Vol. 186. pp. 123-131. 2017.   DOI
59 Lai, R. K., "Inventory signals." Harvard NOM Research Paper Series (06-09), 2006.
60 Vickery, S. K., Jayaram, J., Droge, C., and Calantone, R., “The effects of an integrative supply chain strategy on customer service and financial performance: an analysis of direct versus indirect relationships,” Journal of Operations Management, Vol. 21, No. 5, pp. 523-539, 2003.   DOI
61 WISTA (World Information Technology and Service Alliance)., Digital Planet. Vienna, VA, USA, 2002.