The Role of Information Technology in Alliances and Mergers.

Abstract

This dissertation examines how investments in information technology (IT) influence the value that firms derive from merging or collaborating with other firms. The dissertation is organized as follows. The first chapter, entitled Towards a Theoretical Framework of Information Technology in Alliances and Mergers, describes the central themes of this dissertation, synthesizes the prior relevant research, and elaborates upon three theoretical perspectives useful in understanding role of IT in corporate alliances and mergers. This is followed by a theoretical essay, entitled Propositions on the Value of Flexible IT Systems in Strategic Alliances, which focuses on the contexts in which IT flexibility has value in strategic alliances, reveals some open questions on this topic, and provides a set of propositions intended to motivate further work. The next chapter, entitled Information Technology, Service-Oriented Architectures, and the Firm-Value Effects of Alliance Formation, examines the influence of flexible IT architecture and IT investment in the effect of alliance activity on firm performance utilizing data from 375 firms that are publicly listed in the United States and that span multiple industries. The final chapter, entitled The Effects of Information Technology Investment and Integration Costs on Merger Value in the U.S. Commercial Banking Industry, examines the influence of IT investment and merger integration costs on merger value, using measures of both long-term performance change and short-term cumulative abnormal returns. Core findings of this dissertation suggest that IT investment and flexible IT infrastructures have measurable effects on firm-value in multi-firm contexts, by enhancing the value that firms derive particularly from collaborative corporate alliances or deeply integrative mergers.