An empirical investigation of technology literacy at the executive management levels and firm performance

Past research posits that executive technology literacy influences strategy development, technology adoption, and firm success (Lefebvre et al., 1997; Thong et al., 1995; McGee et al., 1994). Others have supported the need for a chief technology officer to specifically exploit the ever-expanding universe of technological opportunities available to the firm (Adler et al., 1990). The objective of this paper is to examine the relationship between executive technology literacy and financial performance in IPO firms. Based on the theory, four hypotheses were developed to examine the relationship between executive technology literacy and firm performance. Specifically, the hypotheses suggest that the existence of a technology experienced chief executive officer (CEO) or a chief information officer (CIO) or chief technology officer (CTO) enhances average sales growth over three years. To test the hypotheses, 67 firms in computer-related industries who completed IPOs by the end of 1997 were randomly identified for this study. The computer industry sector was selected because in many new ventures have emerged due to the fast paced evolution of information technologies. IPO firms were selected for this study because they present a unique opportunity to evaluate firms that are undergoing significant change