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

Abstract

This study examines the influence of family owner-ship on information technology (IT) investment and its impact on the moderating effect of environmental hostility on the relationship between a firm’s IT in-vestment and its performance in an emerging econ-omy context. We theorize that the roles of family ownership can be bi-directional under varying co-ningencies; thus comprehensive studies on family ownership are much needed. This study aims to ad-dress 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 environ-mental hostility on the IT investment-firm perfor-mance relationship. Contributions and implications of our research are discussed.