COMPLEMENTARITY OF IT INFRASTRUCTURE AND E-COMMERCE CAPABILITY
The Complementarity of Information Technology Infrastructure and E-Commerce Capability: A Resource-Based Assessment of Their Business Value
KEVIN ZHU is on the faculty of Information Systems in the Graduate School of Management at the University of California, Irvine. He received his Ph.D. and M.S. from Stanford University. His research focuses on economic and organizational impacts of information technology, business value of IT in e-business environments, and economics of electronic markets. His work has been published or accepted for publication in of his papers won the Best Paper Award of the International Conference on Information Systems (ICIS) in 2002 and 2003, respectively. He was the recipient of the Academic Achievement Award of Stanford University, and the Charles and Twyla Martin Excellence in Teaching Award of the University of California. ABSTRACT: This study seeks to assess the business value of e-commerce capability and information technology (IT) infrastructure in the context of electronic business at the firm level. Grounded in the IT business-value literature and enhanced by the resource-based theory of the firm, we developed a research framework in which both the main effects and the interaction effects of e-commerce and IT on firm performance were tested. Within this theoretical framework, we formulated several hypotheses. We then developed a multidimensional e-commerce capability construct, and after establishing its validity and reliability, tested the hypotheses with empirical data from 114 companies in the retail industry. Controlling for variations of firm size and subindustry effects, our empirical analysis found a strong positive interaction effect between IT infrastructure and e-commerce capability. This suggests that their complementarity positively contributes to firm performance in terms of sales per employee, inventory turnover, and cost...