The Effects of Information Technology in Retailer Performance and Survival: The Case of Store-Based Retailers

Abstract

This research aims to empirically examine the effects of Information Technology (IT) in the performance and survival of store-based retailers. In particular, we investigate how two types of IT resources—Overall IT investment and Human IT resources—respectively influence retailer performance and survival. We draw on the resource-based view, dynamic capabilities, and IT business value research to develop the hypotheses. Our study employs a longitudinal panel dataset at the firm level obtained from secondary sources from 2010 to 2021. Our sample includes 95 store-based public retailers in the U.S. and has 654 firm-year observations in total. We employ the dynamic panel model and binary logistic regression method to investigate the effects of IT resources on retailer performance and survival, respectively. Our empirical results indicate that while overall IT investment has a positive effect on a retailer’s survival, human IT resources positively influence performance. In addition, stronger performance leads to greater survival likelihood. The findings provide important theoretical, managerial and policy implications concerning the business value of IT in the retailing context.