Information technology capability as competitive advantage in emerging markets: Evidence from India

Abstract

Purpose

The purpose of this paper is to examine the impact of superior IT capability on financial performance of firms in the chemicals and chemical products industry in India.

Design/methodology/approach

Financial performance of 28 firms with superior IT capability has been compared with benchmark over a period of six years.

Findings

This research has five important findings for the chemicals and chemical products industry in India: there is positive association between superior IT capability and return on sales (ROS); firms with superior IT capability are able to earn higher margins on their products; asset turn of firms with superior IT capability is less than benchmark; capital markets give higher valuation to firms with superior IT capability; and this superior performance in terms of better ROS and higher capital market valuation is sustainable over a period of time.

Originality/value

This is the first empirical study that has analysed the influence of IT capability on financial performance of firms in a specific industry in the context of India.

Citation

Arora, B. and Rahman, Z. (2017), "Information technology capability as competitive advantage in emerging markets: Evidence from India", International Journal of Emerging Markets, Vol. 12 No. 3, pp. 447-463. https://doi.org/10.1108/IJoEM-07-2015-0127