The Effect of IT Complementary Resources on Fast Growth Small-to-Medium Enterprise Performance: A Resource-based View

Owing to limited resources available to small-to-medium enterprises (SMEs) to take advantage of technologies, IT is regarded as less important to SMEs compared with larger firms. Understanding whether and how IT helps SMEs to achieve business advantage still remains unclear. Drawing upon the resource-based view theory, the information systems (IS) and fast growth company literature, we develop and test a theoretical model that integrates IT complementary resources, business process performance and firm performance. We propose that fast growth SMEs are highly entrepreneurial and innovative, know how to strategically utilize IT to improve business processes and thus achieve rapid growth. Structural equation modeling is employed to test our theoretical conceptualization of 310 Australian fast-growth SMEs across different industrial sectors. The results show that IT complementary resources do lead to firm growth through enhancing activity integration and information sharing processes along the value chains. This research contributes to the ongoing debate of IT business value in the SME context and highlights the ways in which IT helps fast growth SMEs to achieve business success.

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