The effect of information system capabilities on medium and large enterprises’ firm performance: A moderated mediation analysis

The global corporate world has been subjected to rapid changes due to technological advancements and the increasing pressure from stakeholders to attain sustainable competitive advantage. Despite these technological advancements, there is limited amount of academic literature examining the effect of the Information System Capabilities to the corporation’s overall firm performance. This prompts the question of whether such efforts will positively affect a firm’s performance. The researchers made use of a moderated mediation model to examine the effects of the meditiators– decision-making performance (DMP) and business-process performance (BPP), and the moderator– innovation performance (IP) between the relationship of IS capabilities and firm performance. Through a convenience sampling, the researchers were able to gather managers, IT professionals, and non-IT professionals from 167 companies from Metro Manila. Through a cross-sectional research design, the proponents used PLS-SEM to generate results, Findings showed that IS infrastructure capability, decision-making performance, and business-process performance showed direct positive effect to firm performance, whereas only the partial mediation of business-process performance on IS infrastructure capability and firm performance was significant, and finally majority of the moderating effects of innovation performance demonstrated a significant inverse effect on the direct effects. Keywords: IS Capabilities, Decision-making performance, business process performance, and firm performance, innovation performanc