What is it about?
We examine the effect of high-quality information technology (IT) on management's capital investment decisions. Evaluating capital investment decisions with contemporary investment efficiency and long-term measures of investment effectiveness, we document a positive relation between high-quality IT and capital investment decision quality. In particular, we find high-quality IT is associated with more optimal levels of investment as well as fewer future fixed asset write-downs. We also disaggregate investment efficiency and find the relation with IT quality holds for investment decisions related to capital expenditures and acquisition but not research and development expenditures. Overall, our results suggest managers equipped with better internal information from higher quality IT are able to make superior capital investment decisions.
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This page is a summary of: High-Quality Information Technology and Capital Investment Decisions, Journal of Information Systems, October 2019, American Accounting Association,
DOI: 10.2308/isys-52634.
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