Exploring the performance effects of Internetworking

Extant theory presents two explanations as to how IT inputs might affect firm performance: direct or indirect associations between IT inputs and overall economic performance are proposed. A survey of 550 firms indicates that in the case of internetworking the relationship is indirect. Internetworking associates with overall economic performance, but only through proximate internetworking related performance. However, internetworking performance explains very little of the variance in overall economic performance. While enhancing operational efficiency, the Internet enabling of business operations offers little IT-derived competitive advantage.

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