Understanding IT governance effectiveness in Asia: An event study

Chong, Josephine L. L.; Duong, Linh N. K.

Abstract

The study seeks to examine the impact of Information technology (IT) governance structure, process and relational mechanisms on firm performance. Using an event study, we collected a sample of 70 announcements of IT governance adoption investments. We found that most firms adopt all three types of IT governance mechanisms. IT governance structural mechanisms have a positive impact on firm’s profitability. In contrast, IT governance process and relational mechanisms have a negative association with firm performance. More interestingly, the findings provide insight for organizations that they should realize the potentially negative impact of the controls requirements of Sarbanes-Oxley Act Section 404 and IT leadership on firm performance.

• Journal Article Type: Article
• Acceptance Date: Jul 1, 2017
• Publication Date: 2017
• Deposit Date: Jul 23, 2021
• Print ISSN: 1943-7544
• Publisher: Association for Information Systems
• Peer Reviewed: Peer Reviewed
• Volume: 9
• Issue: 1
• Article Number: 3
• DOI: https://doi.org/10.17705/1pais.09102
• Keywords: Event study; Financial Performance; IT Governance
• Public URL: https://uwe-repository.worktribe.com/output/7487257
• Publisher URL: https://journal.ecrc.nsysu.edu.tw/index.php/pajais/article/view/397
• Related Public URLs: https://researchportal.northumbria.ac.uk/en/publications/understanding-it-governance-effectiveness-in-asia-an-event-study