An Empirical Research on Relationship between Information Technology Capability and Firm Performance the Evidence from the Listed Companies and Informatization Power 500 in China

This paper empirically examines the relationship between information technology (IT) capability and firm performance in Chinese manufacturing industry based on objective evaluation. A matched-sample comparison group methodology, publicly available ratings and performance data from annual financial reports of listed companies are used to assess IT capability and firm performance. Our results indicate that firms with superior IT capability outperform a control sample of firms on a variety of long-term operational, growth and profitability performance measures. However, for the short-term performance, only operational performance outperforms, growth and profitability performance do not outperform.