Is support for information sharing and interpretation, and firm performance: The roles of IS connectivity

This study examined and tested the roles of information systems (IS) connectivity in influencing the performance impacts of IS support for information sharing and IS support for information interpretation. Using data collected from a survey of large U.S. firms and the Research Insight (Compustat) database, the results showed that when IS connectivity was high, IS support for information sharing was positively related to profitability while IS support for information interpretation was negatively associated with profitability. These findings suggest that a high level of IS connectivity is a two-end sword for firms which rely on both IS support for information sharing and IS support for information interpretation for competitive advantage. On one hand, a high level of IS connectivity enabled a firm to reap economic benefits from IS support for information sharing. On the other hand, a high level of IS connectivity hindered the firm's ability to obtain superior performance from IS support for information interpretation.