Information Technology Investment, Environmental Hostility, and Firm Performance: The Roles of Family Ownership in an Emerging Economy

Authors: Xue Ning, Jiban Khuntia, Abhishek Kathuria, Prasanna P. Karhade

Proceedings of the 53rd Hawaii International Conference on System Sciences, (HICSS – 53) 2020

Abstract

This study examines the influence of family ownership on information technology (IT) investment and its impact on the moderating effect of environmental hostility on the relationship between a firm’s IT investment and its performance in an emerging economy context. We theorize that the roles of family ownership can be bi-directional under varying contingencies, thus comprehensive studies on family ownership are much needed. This study aims to address this research gap. A panel dataset of more than 3,000 large Indian publicly traded firms is used to test our theory. The results suggest that on the one hand, family ownership has a negative effect on IT investment, and on the other hand, when the external environment is hostile, family ownership can help to reduce the negative moderating impact of environmental hostility on the IT investment-firm performance relationship. Contributions and implications of our research are discussed.