Understanding IT Governance Effectiveness in Asia: An Event Study

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

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.

Keywords


IT Governance; Financial Performance; Event study

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Chong, J. L. L., Duong, L. N. K. (2017). " Understanding IT Governance Effectiveness in Asia: An Event Study "Pacific Asia Journal of the Association for Information Systems, 9(1), pp.29-54.