This dissertation includes three essays that examine the impact of information technology on organizational performance. In the first essay, we examine the impact of network structure in the hiring of IT versus non-IT labor on firm performance. We find that hiring IT workers from a structurally-diverse network of firms has a positive effect on firm productivity, while there is no similar effect for non-IT labor in general. We attribute this to the different nature of knowledge diffused through the two types of labor: IT labor enables the transfer of new and innovative firm practices which benefits from diversity, while non-IT labor flows are associated with implementation of organizational practices, which may benefit from hiring more employees with a common knowledge base.
In the second essay, we examine the economic value of social media investments and identify the organizational complements. We argue that social media brings in large amounts of real-time data, requiring a sufficient amount of data analytical skills for organizations to effectively process the information and integrate it into organizational decision making. We find evidence that the value of social media investments is higher in firms with a larger pool of data analytic skills in the labor force. In addition, social media’s positive impact on firm performance extends beyond the marketing department, and is further increased when the data analytic skills are dispersed throughout the firm.
In the third essay, we investigate whether startup firms’ use of social media is associated with increased success in raising venture capital. We find that an active social media presence and strong Twitter influence increase a startup’s chances of receiving more funding and from a larger pool of investors. Specifically, social media improves startup funding success through two channels: reducing the search cost for investors to discover new investment opportunities and providing an additional channel of information for investors to better evaluate startup quality
