IT Capability And Firm Performance: An Empirical Investigation

Based on the Resource-based View (RBV) and referred to relative literature, this thesis identified the three components of IT capability, namely, IT infrastructure capability, Embedded IT human capability and comprehensive organizational capability. An analytical framework concerning the relationship between IT capability and organizational performance was developed accordingly. Research hypotheses were then formulated and questionnaire designed. Questionnaire survey was conducted on, and data gathered from, 139 enterprises operating in Guangdong Province. An empirical analysis was performed.Results showed that the development of organizational IT capability and the impact of such capability on organizational performance have been affected to some extend by contextual factors, such as industry, firm size, type of ownership and location. More important, our empirical analysis found a strong positive correlation between IT capability and firm performance. While IT infrastructure capability, Embedded IT human capability and comprehensive organizational capability were all found as positively related to firm performance, comprehensive organizational capability appeared as the most influential factor, and IT infrastructure capability exerts least influence. Overall, research results are consistent with the resource-based theory. Directions for future studies and policy implications were also drawn.