Information Technology and Innovation Outputs: The Missing Link of Search Evolution

Recent literature documents mixed findings on the impact of information technology (IT) investment on firm innovation outputs, calling for deeper exploration of the mechanisms through which IT influences innovation that can reconcile these mixed findings. Based on the evolutionary theory of the firm, we theorize the impacts of IT investment on the variation of firm search behavior in spanning various existing boundaries. Specifically, we explain how and why firms with greater IT investment are more likely to search across technological, organizational, geographical, and temporal boundaries in recombining knowledge elements, which has curvilinear impacts on the quantity and quality of innovation outputs. Using a panel data set from multiple archival sources, we found robust empirical evidence corroborating our theory