Does IT Help Firms to Become More Entrepreneurial?: The Role of Enterprise IT

Abstract

The role of IT systems in firms’ creation of new businesses i.e., firm-level entrepreneurship, has received increasing attention from researchers and practitioners. Yet, prior research in this area shows limitations of differing conceptualizations of IT systems, use of cross-sectional designs, and overlooking the effect of contingencies. Motivated by these gaps, we investigate the impact of firms’ deployment of enterprise IT systems on their entrepreneurial action of creating a new business, through the perspectives of IT-enabled digital options and strategic flexibility. Analysis on panel data from 7,830 South Korean manufacturing firms during 2007-2013 shows that: 1) the range of enterprise IT systems deployed by firms is positively associated with their likelihood of planning to start a new business, and 2) the positive relationship between them is strengthened under a turbulent environment (i.e., the 2008-2009 financial crisis period). The study’s contributions, implications, and future research plan are discussed