Evolution of the impact of e-business technology on operational competence and firm profitability: A panel data investigation

We examine the evolution of the impact of e-business technology capability on operational competence and firm profitability.This is an empirical study with a three-year panel dataset of 154 large firms in Spain for the period 20082010.E-business technology has a positive effect on operational competence that decreases over time.Operational competence has a positive impact on firm profitability that becomes more substantial over time. This study examines the evolution of the impact of e-business technology on operational competence and profitability using a panel dataset of 154 Spanish firms. We find that (1) e-business technology has a positive effect on operational competence that decreases over time and (2) the firms proficiency in exploiting a portfolio of operational capabilities has a positive impact on profitability that becomes more substantial over time. The findings provide some insights on how the initial and subsequent IT investments affect operational competence and profitability over time. This study methodologically illustrates how to perform a partial least squares estimation using panel data.

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