Information technology and performance in industrial business relationships: the mediating effect of business development

Purpose - The study addresses a gap in research concerning the specific purpose of information technology (IT) in business relationships and how it impacts business development and relationship performance. To fill this gap, the purpose of this study is to investigate the prospective effects of IT on business development and relationship performance in the business relationships of industrial firms. Design/methodology/approach - Building on previous research from the industrial business relationship field, 353 relationships between Swedish industrial firms and their customers are analyzed with linear structural relations in LISREL. Findings - The findings show that the effect of IT on relationship performance is not direct but mediated by business development measured in terms of business creation and product development. Research limitations/implications - The study's results imply that IT that is integrated in inter-firm operations has to be assigned a specific purpose to effectively influence relationship-specific performance. The results also indicate that more research is needed to provide additional insights about the relation between IT and performance in business relationships. Social implications - If the full potential of IT-based solutions could be reached, then this could lead to the generation of new products and technologies and more competitive companies, which in turn would create more jobs and greater wealth. Originality/value - In conclusion, this study fills a gap in research by highlighting that IT studied with a business relationship approach is particularly important under certain conditions. As such, the study contributes to the research stream seeking to understand the role of IT in industrial marketing and how IT should be used for increasing relationship performance.