INDIGO Home University of Illinois at Urbana-Champaign logo uic building uic pavilion uic student center

Information technology, revenues, and profits: Exploring the role of foreign and domestic operations

Show full item record

Bookmark or cite this item: http://hdl.handle.net/10027/21721

Files in this item

File Description Format
PDF ITGlobalizationPaper_30Nov16_for_openaccess.pdf (336KB) Main Article PDF
Title: Information technology, revenues, and profits: Exploring the role of foreign and domestic operations
Author(s): Mithas, S; Whitaker, J; Tafti, A
Subject(s): Business value of IT Foreign costs Foreign profits Foreign revenues Globalization Internationalization IT expenditures Multinational corporations
Abstract: Howdoes information technology (IT) enable firms to globalize their operations and achieve higher foreign profits? We use archival data for multinational firms publicly traded in the United States for the years 1999-2006, and find indirect evidence for the role of IT to help firms achieve higher foreign profits through revenue growth rather than cost reduction. Our findings suggest that foreign responsiveness plays a more important role in generating foreign profits than does value chain structure. Our exploratory analyses for the effect of IT on domestic revenues and profits suggest some evidence for equalization of returns across foreign and domestic operations. Among additional results, we find that research and development is positively associated with foreign revenues and foreign profits with an effect greater than that of IT, and advertising is positively associated with foreign revenues with an effect greater than that of IT. By documenting how IT creates value for firms through globalization,we extend the business value of IT and international business literatures that have so far touched on firm-level globalization benefits from IT only in passing. The findings can help managers decide how to allocate discretionary expenditures to achieve strategic objectives such as foreign and domestic revenues and profits, and the role of revenue versus cost mechanisms. © 2017 INFORMS.
Issue Date: 2017-06-01
Publisher: INFORMS Inst.for Operations Res.and the Management Sciences
Citation Info: Mithas, S., Whitaker, J. and Tafti, A. Information technology, revenues, and profits: Exploring the role of foreign and domestic operations. Information Systems Research. 2017. 28(2): 430-444. 10.1287/isre.2017.0689. Article
Type: Article
Description: "This is a copy of an article published in the information systems research © 2017 INFORMS Inst.for Operations Res.and the Management Sciences. DOI: 10.1287/isre.2017.0689"
URI: http://hdl.handle.net/10027/21721
ISSN: 10477047
Date Available in INDIGO: 2017-09-29
 

This item appears in the following Collection(s)

Show full item record

Statistics

Country Code Views
United States of America 54
Russian Federation 14
China 10
France 2
Italy 2

Browse

My Account

Information

Access Key