A Resource-Based Perspective on Information Technology Capability and Firm Performance: An Empirical Investigation1

Abstract

The resource-based view of the firm attributes superior financial performance to organizational resources and capabilities. This paper develops the concept of IT as an organizational capability and empirically examines the association between IT capability and firm performance. Firm specific IT resources are classified as IT infrastructure, human IT resources, and IT-enabled intangibles. A matched-sample comparison group methodology and publicly available ratings are used to assess IT capability and firm performance. Results indicate that firms with high IT capability tend to outperform a control sample of firms on a variety of profit and cost-based performance measures.