Exploring the Effect of Digital Investment on IT Innovation

Abstract

Using the technology-organization-environment framework, this study examines three antecedents of digital investment as well as the influence of digital investment on IT innovation. The empirical evidence from a sample of Chief Information Officers (CIO)from US firms suggests that IT competence, competitive pressure and organizational agility are key factors that influence digital investment. Furthermore, the findings confirm the positive relationship between digital investment and IT innovation. Contrary to prior research, IT competence did not have a significant relationship with IT innovation. However, the results revealed that digital investment mediated the relationship between IT competence and IT innovation.