Abstract
Although the role that information technology (IT) executives’ expertise has in firm outcomes is well documented, little empirical work investigates the effect of the IT ability of non-IT executives on firm outcomes. We apply upper echelons theory and create a unique measure of chief executive officer (CEO) IT ability to empirically investigate its impact on bank loan pricing and nonpricing terms. Examining a sample of firms between 2002 and 2017, we find that CEO IT ability is associated with lower cost of debt, less collateral, fewer loan covenants, and fewer credit rating downgrades. Further, we show that our results are not due to high tech firms and are incremental to firmlevel IT capability. Our results extend upper echelons theory and suggest that IT ability is an important CEO characteristic that can be influential in improving lending outcomes.
| Original language | English |
|---|---|
| Pages (from-to) | 7-37 |
| Number of pages | 31 |
| Journal | Journal of Information Systems |
| Volume | 37 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 1 Mar 2023 |
Keywords
- chief executive officer expertise
- loan covenants
- managerial IT ability
- upper echelons theory
ASJC Scopus subject areas
- Management Information Systems
- Software
- Information Systems
- Accounting
- Human-Computer Interaction
- Information Systems and Management
- Management of Technology and Innovation