Not for the Faint-hearted? The Influences of Firms’ Risk Propensity, Industry and Firm Size on Strategic IT Investment Propensity

This study examines the influence of firms’ risk propensity on strategic IT investment propensity, as well as the moderating influences of industry and firm size. Data is collected from COMPUSTAT and also coded from annual reports (160 annual reports for 2011-2015 fiscal years from 32 companies across 3 industries). Findings suggest that high risk propensity, to some extent, promotes firms to invest differently from industry’s prevalent IT strategic role, and that the promoting influence of high risk propensity is especially strong for small firms and for the less innovative automate IT investments; small firms also show increase in the highly innovative transform IT investments, however, the increase from small firms is cancelled out by the decline in transform IT investments from large firms. Discussion, theoretical and practical implications, limitations, and future research directions are provided.