Essays On The Role Of It-Related Resources In Firm Innovation
Dr Huang Ke-Wei, Associate Professor, School of Computing
COM1 Level 2
Video Conference Room, COM1-02-13
Abstract:
This thesis comprises of two studies which attempt to address unanswered questions in prior research on the role of IT in firm innovation, specifically: How do firms' IT-related resources influence their innovation-related capabilities and activities? For example, literature on software-driven innovation points to the role of IT-related human resource in terms of IT professionals who influence firms' innovation activities by contributing their IT knowledge and talents. Yet, little is known about how these professionals constitute firms' innovation capability, as well as how firms manage their recruitment for innovation. In addition, the role of IT-related technology and strategic resources e.g., enterprise IT systems and their combinations (or IT portfolios) in firms' creation of new businesses has received increasing attention from researchers and practitioners as another form of innovation. However, prior studies in these under-explored areas were conducted based on broad conceptualizations of IT systems with cross-sectional analysis methods which hindered further developments of theory and practice on the topic.
The first study of this thesis attempts to theorize and test how firms manage their capability for creating innovation (i.e., absorptive capacity) via hiring of foreign IT professionals. Deriving from the concept of absorptive capacity (an indicator of firms' innovation capability) and its interplay with labor mobility of IT professionals, the following hypotheses are proposed: 1) a firm's existing absorptive capacity (proxied through R&D intensity) is negatively related to the number of foreign IT professionals hired in the next time period (in terms of H1-B Labor Certification Applications), and in turn, 2) the hiring of foreign IT professionals is positively related to firms' absorptive capacity in the next time period. Linear panel regression analyses on a dataset of 147 US software firms during 2008 to 2014 supported both hypotheses.
The second study of this thesis attempts to address another gap by investigating the impact of firms' deployment of enterprise IT systems on their entrepreneurial action of creating a new business. Through the lens of IT-enabled digital options and strategic flexibility as well as their potential interplay with turbulent environment, two hypotheses are formulated: 1) the range of enterprise IT systems deployed by a firm is positively associated with the firm's entrepreneurial action of creating a new business, and 2) the positive association between the range of enterprise IT systems deployed and a firm's entrepreneurial action of creating a new business is strengthened under a turbulent environment. Analysis on the panel data from 7,830 South Korean manufacturing firms during 2006 to 2013 supported these hypotheses. In addition, post-hoc analysis found that firms need to organize their IT portfolios in terms of combining different enterprise IT systems around an ERP system to facilitate their firm-level entrepreneurship.
Overall, this dissertation attempts to address gaps in the prior literature on firms' management of IT-related resources for innovation and entrepreneurship with two empirical studies. From their findings, this dissertation contributes to research and practice. For research, this dissertation proposes and tests an underlying mechanism of 1) how IT-related human resource influences firms' innovation-related capability, and 2) the impact of IT-related technology and strategic resources on firm-level entrepreneurship. For practice, this dissertation offers insights on 1) how firms can leverage labor mobility for their innovation-related capability, and 2) how to organize firms' IT portfolios for their firm-level entrepreneurship.