While prior research has established that information technology (IT) investment has a significant impact on firm performance, relatively few studies have provided insights into the antecedents of IT ...investment decisions. By integrating the behavioral theory of the firm and agency theory, we propose a behavioral agency theory to explain performance shortfalls and corporate governance, which monitors and controls managers' tendency of overinvestment or underinvestment in IT, as key drivers that jointly determine IT investment. As such, IT investment facilitates a firm's problemistic search that generates innovation in response to performance gaps. We further examine the role of innovation outputs as a mediating mechanism linking IT investment to firm performance. Our econometric analysis of a large-scale panel dataset provides empirical evidence corroborating our theory. Overall, this study contributes a behavioral agency theory to deepen our understanding about performance drivers and outcomes of IT investment decisions.
Digital social innovation is important for addressing various social needs, especially from those who are economically disadvantaged. For instance, open source software (OSS) is developed by mass ...collaboration on digital communities to provide software users free alternatives to commercial products. OSS is particularly valuable to meet the needs of numerous disadvantaged users for whom proprietary software is not affordable. While OSS projects are lack of formal organizational structure, project leaders play a significant role in initiating and managing these projects and eventually, influencing the degree to which the developed software is used and liked by users. Drawing on resource dependence theory, we investigate the impacts of two team‐level characteristics of OSS project leaders (ie, size and tenure) on how well the developed software can address users' needs, with regard to the quantity of software being used by users and the quality of software to users' satisfaction. Further, from a resource dependence perspective, we examine the moderating role of project leaders' network ties in shaping the contingency of these effects. By using a large‐scale dataset from 43 048 OSS development projects in SourceForge community, we find empirical evidence corroborating our theory. Taken together, our findings suggest the boundary‐spanning role of project leaders in developing digital social innovation.
Digital entrepreneurship is an emerging phenomenon in the digital era. While the literature has started to look into this phenomenon, the attention has been paid mainly to digital startups in free ...markets. In a regulatory environment, however, it is unclear how a new startup might digitally transform business through entrepreneurial actions to overcome the challenges and barriers from regulations. Drawing on the dynamic capabilities and digital innovation literature, I conduct an in-depth longitudinal study at a Dutch digital startup. I trace the underlying mechanisms through which it creates digital solutions to the regulations in the Dutch healthcare sector — demand-driven digital disruption, fast digital adaptation, and continuous digital transplantation. Novel implications for digital entrepreneurship in the regulatory environment are presented.
•Digital entrepreneurship in the regulatory environment is studied.•Three underlying mechanisms are traced in an in-depth longitudinal study.•Demand-driven digital disruption provides entrepreneurial opportunities.•Fast digital adaption captures entrepreneurial opportunities.•Continuous digital transplantation repurposes digital platform in other settings.
With firms' increasing use of social media platforms, such as online user innovation communities (OUICs), customers are actively participating in firm-sponsored innovation activity by posting and ...commenting on new ideas for improving the firms' products and services, or to develop new ones. While it has been suggested that OUICs promote user interactions, it is largely unclear how other users' feedback may stimulate a focal user's contribution to such OUICs. Drawing on a media usage theory, we identify multifaceted benefits from user feedback that are cognitive, integrative and affective in the archival comments received by a focal user, and examine their individual and joint impacts on the user's future contribution in terms of both ideating and commenting behavior. We conduct a longitudinal study by collecting a large-scale, quantitative data set from a leading OUIC between 2008 and 2015, which reveals novel findings on the nuanced role of user feedback on social media in stimulating innovation.
•User feedback has multifaceted benefits to stimulate innovation on social media.•A longitudinal study of an online user innovation community is conducted.•Cognitive and integrative benefits can individually influence user contribution.•Cognitive, integrative and affective benefits also jointly influence user contribution.•These benefits demonstrate distinct impacts on idea and comment contribution.
A firm may learn how to manage coopetition as it becomes more experienced. Conversely, because of the complexity of coopetition, a firm may fail to make sense of its experiences in working with ...coopetitors and may thus fail to learn from these experiences effectively. Building on this premise, we develop a contingency view regarding the relationship between coopetition experience and firm profitability — as coopetition experience can enhance or hurt firm profitability and the internal abilities of firms to capitalize on experience are heterogeneous. Analyzing a panel data set from 911 Spanish manufacturing firms between 2007 and 2014, we provide empirical evidence on the often overlooked but critical detrimental effects of coopetition experience on firm profitability and reveal the asymmetric moderating role of a firm's technological investments in information technology (IT) and R&D. Specifically, we find that the impact of coopetition experience on firm profitability is negative and becomes more negative as R&D investment increases, which suggests that R&D investment may aggravate the detrimental effects of coopetition experience. However, as IT investment increases, the effect of coopetition experience on firm profitability shifts from negative to positive, indicating that firms can counteract the “dark side” of coopetition experience through substantial IT investment.
In light of the fact that firms increasingly use information technology (IT) for open innovation initiatives, this paper explores how IT investment influences their external search from multiple ...perspectives: breadth, and depth along vertical, horizontal and societal dimensions. The basic premise is that IT investment has inverted U-shaped relationships with external search breadth and depth. On the one hand, IT investment enhances firms' ability to acquire more information from external knowledge sources. On the other hand, however, IT investment can bring abundant information from external knowledge sources to firms, making it increasingly difficult to widely and deeply use the information from available sources. Beyond a certain threshold, excessive IT investment is likely to cause information overload, forcing firms with limited attention to narrow down and go less deeply into their external knowledge sources. By using a large-scale panel data set from German firms, we find empirical evidence corroborating our theory.
•Information technology (IT) is an antecedent of external search in the open innovation age.•IT investment has an inverted U-shaped relationship with external search breadth.•IT investment has an inverted U-shaped relationship with external search depth.•The relationship holds for vertical, horizontal and societal knowledge sources.
Although big data analytics have been widely considered a key driver of marketing and innovation processes, whether and how big data analytics create business value has not been fully understood and ...empirically validated at a large scale. Taking social media analytics as an example, this paper is among the first attempts to theoretically explain and empirically test the market performance impact of big data analytics. Drawing on the systems theory, we explain how and why social media analytics create super-additive value through the synergies in functional complementarity between social media diversity for gathering big data from diverse social media channels and big data analytics for analyzing the gathered big data. Furthermore, we deepen our theorizing by considering the difference between small and medium enterprises (SMEs) and large firms in the required integration effort that enables the synergies of social media diversity and big data analytics. In line with this theorizing, we empirically test the synergistic effect of social media diversity and big data analytics by using a recent large-scale survey data set from 18,816 firms in Italy. We find that social media diversity and big data analytics have a positive interaction effect on market performance, which is more salient for SMEs than for large firms.
Whereas most coopetition research tends to conceptualize coopetitors as a homogeneous group, we explicitly consider the heterogeneity of coopetitors. In particular, we examine the impact of a focal ...firm's technological, market, and geographical overlap with coopetitors on its ability to generate breakthrough inventions. We expect that these different dimensions of overlap and their interactions shape knowledge acquisition opportunities and knowledge leakage risks in coopetition, which in-turn influences the ability of the focal firm to generate breakthrough inventions. To examine our theoretical arguments, we construct a unique data set from 323 firms in the global solar photovoltaic industry between 1995 and 2015. Our results indicate an inverted U-shaped relationship between a focal firm's technological overlap with its portfolio of coopetitors and its breakthrough inventions. In addition, we find that its market and geographical overlap with the portfolio of coopetitors moderate this curvilinear relationship. However, when both market overlap and geographical overlap are simultaneously considered, the moderation effect of geographical overlap becomes insignificant. Jointly, these findings enrich the coopetition literature, pointing to the relevance and importance of considering the interactions between technological, market and geographic heterogeneity of coopetitors.
Our research reveals the significant impact of evolving policy uncertainty on hospital strategies to mitigate cost-based performance deficits in clinical care processes through differentiation in ...search for health information technology (HIT). Key for hospital administrators and managers, our findings reveal the benefit of leveraging external benchmarks for performance feedback, enabling strategic, innovative approaches to HIT investments tailored to enhance clinical care efficiency and cost-effectiveness. Moreover, our findings have important implications for healthcare policymakers, highlighting the necessity to consider the varied responses of hospitals to policy fluctuations. Recognizing that hospitals proactively adapt their HIT portfolios in anticipation of new laws, and that these adaptations are most diverse under moderate policy uncertainty, is crucial. This nuanced understanding can guide policymakers in fostering an environment that encourages both the exploration of novel technologies and the widespread adoption of effective solutions across the healthcare spectrum. By bridging the gap between policy development and hospital administration, our work offers a road map for aligning strategic technological differentiation with policy objectives, ultimately enhancing healthcare delivery and outcomes.
Hospitals have implemented health information technology (HIT) for clinical care to address rising operating costs in recent years. We integrate behavioral and institutional perspectives to explain how hospitals differentiate technological search relative to industry peers (i.e., search differentiation) for HIT portfolios. In the context of the U.S. healthcare industry, we theorize that hospitals’ search differentiation for HIT results jointly from idiosyncratic learning in response to cost-based performance shortfalls and isomorphic pressures in relation to changing policy uncertainty as the Health Information Technology for Economic and Clinical Health (HITECH) Act has unfolded. Based on a panel data set from 3,319 hospitals in 2007–2014, we demonstrate that when costs increase relative to aspiration level, a hospital differentiates its search for HIT by exploring more novel technologies for clinical care relative to peers. As policy uncertainty declines from the conceptualization phase to the enactment phase of the HITECH Act, a hospital’s search differentiation for HIT increases to a greater extent in response to cost-based performance shortfalls as lower uncertainty reduces the need to imitate peers’ search. As policy uncertainty further declines from the enactment phase to the enforcement phase of the HITECH Act and reaches its lowest level, however, the hospital’s search differentiation for HIT increases to a smaller extent in response to cost-based performance shortfalls because of policy incentives and professional norms to promote implementation of common technologies. Overall, we provide a more holistic picture of how uncertainty in a dynamic regulatory context intertwines with organizational learning from performance feedback in shaping search differentiation. History: Rajiv Kohli, Senior Editor; Torsten Oliver Salge, Associate Editor. Funding: J. Q. Dong acknowledges the financial support from Nanyang Technological University Grant SUG 022362-00001. Supplemental Material: The e-companion is available at https://doi.org/10.1287/isre.2021.0260 .
Information technology (IT) increasingly changes the ways through which firms develop and commercialize innovation. Prior studies have mainly focused on the direct effect of IT use on innovation ...performance, while little is known about how IT use for different purposes in the innovation processes leads to innovation performance at the organizational level. Drawing on the routine-based absorptive capacity (AC) framework, we conceptualize IT use for knowledge search and relational search as IT-enabled internal and external AC routines and unveil the hierarchical benefits resulting from IT use for innovation. We propose a model in which firms need to purposefully use IT to search for knowledge in the new product development process or search for relationships in the collaborative innovation process, leading to first-order benefits (i.e., internal innovation benefits and open innovation benefits) and, in turn, second-order benefits (i.e., innovation performance). By using a unique data set from 1028 German firms between 2003 and 2007, we find that IT use for knowledge search enhances internal innovation benefits, whereas IT use for relational search increases open innovation benefits. More importantly, internal and open innovation benefits mediate the relationships between IT use for knowledge and relational search and various innovation performance measures. Taken together, our findings shed light on a deeper understanding of the digital innovation value chain.
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