Information technology capability as competitive advantage in emerging markets Evidence from India

Purpose - The purpose of this paper is to examine the impact of superior IT capability on financial performance of firms in the chemicals and chemical products industry in India. Design/methodology/approach - Financial performance of 28 firms with superior IT capability has been compared with benchmark over a period of six years. Findings - This research has five important findings for the chemicals and chemical products industry in India: there is positive association between superior IT capability and return on sales (ROS); firms with superior IT capability are able to earn higher margins on their products; asset turn of firms with superior IT capability is less than benchmark; capital markets give higher valuation to firms with superior IT capability; and this superior performance in terms of better ROS and higher capital market valuation is sustainable over a period of time. Originality/value - This is the first empirical study that has analysed the influence of IT capability on financial performance of firms in a specific industry in the context of India.