Impact of information technology infrastructure flexibility on mergers and acquisitions

Jose Benitez, Gautam Ray, Jörg Henseler

Research output: Contribution to journalArticle

32 Scopus citations

Abstract

Although mergers and acquisitions (M&A) are a common strategy to reduce costs and pursue growth, the variance in returns from M&A is very high. This research examines how information technology (IT) infrastructure flexibility affects M&A. We use a combination of secondary as well as matched-pair survey data from 100 midsize firms in Spain to investigate this relationship. The empirical analysis suggests that IT infrastructure flexibility affects M&A through two key pathways: (1) a flexible IT infrastructure facilitates the development of business flexibility that provides the responsiveness to seize M&A opportunities and make acquisitions, and (2) a flexible IT infrastructure facilitates the development of post-M&A IT integration capability that provides the control to integrate the IT and business resources of the acquired firm and realize the economic benefits from M&A.

Original languageEnglish (US)
Pages (from-to)25-43
Number of pages19
JournalMIS Quarterly: Management Information Systems
Volume42
Issue number1
DOIs
StatePublished - Mar 2018

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Keywords

  • Business flexibility
  • Business value of IT
  • Dynamic capability
  • Endogeneity
  • IT infrastructure flexibility
  • M&A activities
  • Post-M&A IT integration capability
  • Post-M&A performance

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