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Time lag effects of IT investment on firm performance : evidence form Indonesia

The objective of this study is to investigate whether there is a lag effect of IT investment on the financial performance of the firm, both individual and industry-adjusted firm performance. Using a dynamic panel approach of Generalized Method of Moments, we sourced data from 396 firms from multiple...

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Main Authors: Winarno, Wahyu Agus, Tjahjadi, Bambang, Irwanto, Andry
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2021
Online Access:http://journalarticle.ukm.my/18800/1/jeko_553-6.pdf
http://journalarticle.ukm.my/18800/
https://www.ukm.my/jem/issue/v55i3/
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spelling my-ukm.journal.188002022-06-23T08:43:45Z http://journalarticle.ukm.my/18800/ Time lag effects of IT investment on firm performance : evidence form Indonesia Winarno, Wahyu Agus Tjahjadi, Bambang Irwanto, Andry The objective of this study is to investigate whether there is a lag effect of IT investment on the financial performance of the firm, both individual and industry-adjusted firm performance. Using a dynamic panel approach of Generalized Method of Moments, we sourced data from 396 firms from multiple companies listed on the Indonesia Stock Exchange over 2013-2017. The results indicate that IT investment improves the firm financial performance after the first year of investment. IT investment in the current period does not affect its current financial performance because it requires a time lag for the firm to realize its benefits due to the organizational learning process, structural effects, and complementary effects. However, we found an immediate impact of IT investment on firm performance when performance is measured by market performance. Information on IT investment is good news for investors hence the stock price that reflects the future performance of the firms. Penerbit Universiti Kebangsaan Malaysia 2021 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/18800/1/jeko_553-6.pdf Winarno, Wahyu Agus and Tjahjadi, Bambang and Irwanto, Andry (2021) Time lag effects of IT investment on firm performance : evidence form Indonesia. Jurnal Ekonomi Malaysia, 55 (3). pp. 89-101. ISSN 0127-1962 https://www.ukm.my/jem/issue/v55i3/
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description The objective of this study is to investigate whether there is a lag effect of IT investment on the financial performance of the firm, both individual and industry-adjusted firm performance. Using a dynamic panel approach of Generalized Method of Moments, we sourced data from 396 firms from multiple companies listed on the Indonesia Stock Exchange over 2013-2017. The results indicate that IT investment improves the firm financial performance after the first year of investment. IT investment in the current period does not affect its current financial performance because it requires a time lag for the firm to realize its benefits due to the organizational learning process, structural effects, and complementary effects. However, we found an immediate impact of IT investment on firm performance when performance is measured by market performance. Information on IT investment is good news for investors hence the stock price that reflects the future performance of the firms.
format Article
author Winarno, Wahyu Agus
Tjahjadi, Bambang
Irwanto, Andry
spellingShingle Winarno, Wahyu Agus
Tjahjadi, Bambang
Irwanto, Andry
Time lag effects of IT investment on firm performance : evidence form Indonesia
author_facet Winarno, Wahyu Agus
Tjahjadi, Bambang
Irwanto, Andry
author_sort Winarno, Wahyu Agus
title Time lag effects of IT investment on firm performance : evidence form Indonesia
title_short Time lag effects of IT investment on firm performance : evidence form Indonesia
title_full Time lag effects of IT investment on firm performance : evidence form Indonesia
title_fullStr Time lag effects of IT investment on firm performance : evidence form Indonesia
title_full_unstemmed Time lag effects of IT investment on firm performance : evidence form Indonesia
title_sort time lag effects of it investment on firm performance : evidence form indonesia
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2021
url http://journalarticle.ukm.my/18800/1/jeko_553-6.pdf
http://journalarticle.ukm.my/18800/
https://www.ukm.my/jem/issue/v55i3/
_version_ 1736834967604822016
score 13.223943

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