Information technologies and financial prformanceThe effect of technology diffusion among competitors

Resumen

This research analyzes the implications that uneven diffusion of IT among firms populating an industry has on profitability. With this aim we move away from the dominant RBV approaches and focus on the competitive dimension of the technology. We argue that the IT imitation process is much more complex and heterogeneous than implicitly assumed on current research. Indeed, in our framework it is this heterogeneity what allows for the existence of IT-based competitive advantages. We investigate how the adoption patterns of competitors influences firm profitability through its relative position in terms of IT implementation. We test our propositions through the analysis of ATM diffusion in the Spanish Savings Banks between 1986 and 2004. We find that it is not the absolute but the relative level of implementation what drives the profitability impact of IT. In addition, we find that over time, as a �technological race� takes place, any potential benefit obtained with IT adoption is dissipated, resulting on an aggregated negative impact on profitability.