IT Capability and Firm Performance: The Mediating Roles of Interaction Praxis

We investigate how IT-capability leads to more interaction business practices, both through interorganizational systems (IOS) and social media (SM), and how they further lead to marketing effectiveness and firm success. After analyzing the data collected from manufacturers (N=504), we find that (1) IT capability has a significant positive effect on both IOS-enabled and SM-enabled interaction practices; (2) IOS-enabled interaction practice has significant positive effects on both marketing performance and financial performance, while SM-enabled interaction practice only has a significant positive effect on the market performance; (3) both IOS-enabled interaction practice and SM-enabled interaction practice partly mediate the positive influence of IT capability on marketing performance and financial performance; (4) marketing performance partly mediates the positive impact of IOS-enabled interaction practice and fully mediates the positive impact of SM-enabled interaction practice on financial performance.

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