Exploring the Economic Impacts of Disaggregated IT Investments: The Influence of IT Intensity

In recent years, the results of several empirical studies cast doubt on the positive relationship between information technology (IT) and economic performance. To further extend our knowledge, this paper disaggregates IT investment into three different types, insourced IT, outsourced IT, and packaged IT, and investigates their impacts on industry economic performance under moderating effect of industry IT intensity. Based on the annual industry data, we find that for high-IT intensity industries, insourced IT has a negative impact on industry economic performance, but outsourced IT and standard IT have positive impacts. As industry IT intensity declines, the negative impact of insourced IT is alleviated, and the positive effect of outsourced IT or standard IT diminishes. Our findings extend existing research by introducing a new idea, the disaggregation of IT investment, to provide novel insights into the relationship between IT investment and economic performance and the effect of industry IT intensity