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The value of enterprise information systems under different corporate governance aspects

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Abstract

Enterprise information systems (EIS) improve access to information, process optimization and system integration. Such enhanced information processing capabilities have varying effects on firm financial performance under different corporate governance aspects. We examine such interacting effects with data of Chinese listed companies during 2008 and 2013. Our empirical study shows that EIS implementation is associated with higher financial performance when the firm’s ownership is more concentrated or the CEO assumes a dual role as the chair of the board of directors. EIS implementation is associated with lower financial performance when the firm is a state-owned enterprise or within a business group. This study contributes to literature in IT business value in general and research in enterprise systems in particular by expanding our understandings about the varying impacts of EIS under different corporate governance aspects.

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Notes

  1. The Wind database is developed by Wind Information Co., Ltd (Wind Info), headquartered in Shanghai and a leading provider of financial data, information, and software. The China Stock Market and Accounting Research (CSMAR) research database system is jointly produced by GTA Information Technology Co. Ltd, the University of Hong Kong and the China Accounting and Finance Research Center of the Hong Kong Polytechnic University.

  2. We have also estimated our models with two alternative methods for encoding the variable ERP. In one alternative encoding method, we encoded ERP as 1 only if the annual report explicitly discloses the use of ERP. With this encoding method, we estimated our models and obtained similar results. In the other alternative encoding method, if a firm discloses the use of ERP in one year’s annual report, then we encoded the variable ERP as 1 for this firm in this year and all the following years. With this encoding method, our data analysis generates similar results although the magnitude of significance tends to be smaller.

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Authors and Affiliations

  1. Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University, Shanghai, China

    Xin Chen

  2. LeBow College of Business, Drexel University, Philadelphia, USA

    Qizhi Dai

  3. School of Economics, Yunnan University, Kunming, China

    Chaohong Na

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  1. Xin Chen
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  2. Qizhi Dai
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  3. Chaohong Na
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Correspondence to Qizhi Dai.

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Chen, X., Dai, Q. & Na, C. The value of enterprise information systems under different corporate governance aspects. Inf Technol Manag 20, 223–247 (2019). https://doi.org/10.1007/s10799-019-00310-3

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