On Predicting ESG Ratings Using Dynamic Company Networks

2023 | ACM Transactions on Management Information Systems | Citations: 0

Authors: Ang, Gary; Guo, Zhiling; Lim, Ee-Peng

Abstract: Environmental, social and governance (ESG) considerations play an increasingly i ... Expand

Abstract: Environmental, social and governance (ESG) considerations play an increasingly important role due to the growing focus on sustainability globally. Entities, such as banks and investors, utilize ESG ratings of companies issued by specialized rating agencies to evaluate ESG risks of companies. The process of assigning ESG ratings by human analysts is however laborious and time intensive. Developing methods to predict ESG ratings could alleviate such challenges, allow ESG ratings to be generated in a more timely manner, cover more companies, and be more accessible. Most works study the effects of ESG ratings on target variables such as stock prices or financial fundamentals of companies, but few works study how different types of company information can be utilized to predict ESG ratings. Previous works also largely focus on using only the financial information of individual companies to predict ESG ratings, leaving out the different types of inter-company relationship networks. Such inter-company relationship networks are typically dynamic, i.e., they evolve across time. In this paper, we focus on utilizing dynamic inter-company relationships for ESG ratings prediction, and examine the relative importance of different financial and dynamic network information in this prediction task. Our analysis shows that utilizing dynamic inter-company network information, based on common director, common investor and news event-based knowledge graph relationships, can significantly improve ESG rating prediction performance. Robustness checks over different time-periods and different number of time-steps in the future further validate these insights. Collapse

Topics: shapley additive explanation knowledge graph database system missing data network effect

Methods: machine learning econometric modeling longitudinal research Granger causality robustness check

Navigating the Paradox of IT Novelty and Strategic Conformity: The Moderating Role of Industry Dynamism

2023 | International Conference on Information Systems | Citations: 0

Authors: Chaturvedi, Devina; Kathuria, Abhishek; Andrade, Mariana; Saldanha, Terence

Abstract: Although achieving strategic distinctiveness is critical for firms in dynamic i ... Expand

Abstract: Although achieving strategic distinctiveness is critical for firms in dynamic industries, where the competitive landscape and market conditions frequently change, there is a paucity of research on the impact of information technology (IT) on a firm's strategic conformity (or distinctiveness). Motivated by the importance of strategic conformity and emergence of novel technologies, we draw on institutional theory and hypothesize that IT Novelty positively impacts strategic conformity. Second, drawing on resource-based view, we hypothesize that market dynamism and competitive dynamism negatively moderate the effect of IT Novelty on strategic conformity. Third, we hypothesize that the moderating impact is stronger for market dynamism than competitive dynamism. We find support for our hypotheses using a fifteen-year dataset from over 300 U.S. manufacturing firms. Our study contributes to theory and managerial practice by combining institutional and resource-based view perspectives to examine how IT Novelty shapes a firm's strategic conformity, particularly in dynamic industry conditions. Collapse

Topics: database system decision making artificial intelligence internet of things mobile system

Methods: longitudinal research autocorrelation analysis hierarchical linear modeling robustness check regression analysis method

Theories: resource based view of the firm institutional theory

Reassessing the Puzzle of Environmental Management Systems and Their Impact on Firm Performance: A Panel Data Analysis

2023 | International Conference on Information Systems | Citations: 0

Authors: Huber, Maria; Ixmeier, Anne; Kranz, Johann

Abstract: Companies have increasingly adopted environmental management systems (EMSs) in ... Expand

Abstract: Companies have increasingly adopted environmental management systems (EMSs) in response to the need for improving their environmental sustainability and accountability. EMSs enable companies managing their environmental activities, supposedly leading to improved environmental performance and cost savings. However, research findings regarding the effectiveness of EMSs on key environmental and financial performance measures are inconclusive. To address this puzzle, we collected data from various sources to analyze the relationships between EMS certification, environmental performance, and financial performance for the STOXX 600 using panel data regression covering six years. With this comprehensive, large-scale approach, we account for largely neglected indirect effects and widespread validity issues of prior research, such as cross-sectional designs, perception-based performance measures, and small sample sizes. Our results show that EMS certification has a significant positive effect on environmental performance, particularly on emission reduction. We did not find a significant effect of EMS certification and environmental performance on financial performance. Collapse

Topics: financial performance competitive advantage innovation management missing data communication service infrastructure

Methods: longitudinal research autocorrelation analysis robustness check descriptive statistic Wald test

Theories: resource based view of the firm

Blood and Water: Information Technology Investment and Control in Family-owned Businesses

2023 | Journal of Management Information Systems | Citations: 0

Authors: Kathuria, Abhishek; Karhade, Prasanna P.; Ning, Xue; Konsynski, Benn R.

Abstract: Family-owned businesses differ in their strategic intent and behavior as they se ... Expand

Abstract: Family-owned businesses differ in their strategic intent and behavior as they serve as a reservoir of wealth and social status for their family owners. Family-owned businesses demonstrate relatively conservative strategic decision making that aspires long-term wealth preservation and enhancement. For family owners, investments in information technology (IT) raise a predicament as they are risky, yet a long-term imperative. We propose three hypotheses that build upon the thesis that family owners combine a deep understanding of the business with a strong influence on stakeholders within and beyond the firm's boundaries to exert strategic control in the extended enterprise. First, family ownership negatively influences IT investment, because family owners are likely to avoid investments in IT that are frivolous, reduce information asymmetry, or leave auditable digital trails. Second, the negative influence of family ownership on IT investment is weakened when a career professional is appointed in the senior-most executive position of a family-owned business. This is because professional executives strive to utilize IT for control and performance benefits, and family owners desire to use IT to monitor and control the non-family professional executive. Third, family ownership weakens the negative influence of environmental hostility on the relationship between IT investment and firm performance, as family-owned businesses incur less dynamic adjustment costs and maintain better alignment between IT and business strategy. Empirical analysis, consisting of panel regression estimations, on archival data of publicly listed Indian firms in the years 2006 to 2018 provides support for our theory that highlights how IT for control acts as a noneconomic motivation for the strategic IT behavior of firms. In doing so, we bring family ownership into the theoretical foreground for future IS scholarship. We contribute to theory and practice by advancing the nature of ownership and executive management as sources of heterogeneity in IT investment and its business value. Collapse

Topics: IT investment organizational productivity information system use strategic management research and development

Methods: longitudinal research autocorrelation analysis cross sectional research statistical hypothesis test time series analysis

Theories: lemon market theory

INFORMATION SECURITY RISK AND BOUNDARY CHANGING BEHAVIOR

2022 | Americas Conference on Information Systems | Citations: 0

Authors: Pataci, Hilal; Ravichandran, T.

Abstract: The escalating information security threats and their impacts have made firms p ... Expand

Abstract: The escalating information security threats and their impacts have made firms pay careful attention to potential risks they face and the actions they can take to mitigate such risks. We explore if and how the information security risk perceptions of firms shape their boundary-changing behaviors. We argue that organizations have risk transfer, risk avoidance, risk reduction, risk acceptance options, and combine these options in their attempts to reduce the perceived effects of information security risks. Organizations through risk transfer could transfer some effects of information security risks to third parties, while boundary changing behaviors could alter the potential vulnerabilities of a firm and hence decisions to alter firm boundaries are likely to be shaped by risk perceptions. By fine-tuning 11 state-of-the-art NLP models with causal extraction, we find that organizations' information security risk perception is positively associated with their information security risk transfer behavior, and less-risky boundary changing actions. Collapse

Topics: information security risk decision making IT security threat social media Slack

Methods: natural language processing BERT theory development experiment Lagrange multiplier test

Theories: behavioral theory of the firm lemon market theory

Configuring the Enterprise Systems Portfolio: The Role of Information Risk

2022 | Information Systems Research | Citations: 0

Authors: Sambhara, Chaitanya; Rai, Arun; Xu, Sean Xin

Abstract: We investigate how public firms configure their enterprise systems (ES) portfoli ... Expand

Abstract: We investigate how public firms configure their enterprise systems (ES) portfolio when faced with information risk, which refers to the likelihood that corporate financial information is of poor quality. We focus on firms’ configuration of their ES portfolio by introducing a novel construct: ES portfolio balance, or the relative proportion of two categories of ES modules, operational and functional. We draw on the theory of information processing to hypothesize the impact of information risk on ES portfolio balance and how this impact is affected by internal controls. We construct a multisource panel data set of 697 firms and 1,993 firm-year observations from 2005 to 2008 and use econometric and multivariate procedures to test our hypotheses. We find that when faced with an increase in information risk, firms change their ES portfolio balance more toward operational modules. However, when such firms are also faced with materially weak internal controls, they change their ES portfolio balance more toward functional modules instead. These findings expand our understanding of how firms’ information processing needs drive the configuration of their ES portfolio and, more broadly, IT resources portfolio. Collapse

Topics: accounting enterprise information system database system Sarbanes–Oxley Act innovation management

Methods: longitudinal research theory development robustness check autocorrelation analysis statistical hypothesis test

Theories: theory of information

How Appreciation and Attention Affect Contributions to Electronic Networks of Practice

2022 | Journal of Management Information Systems | Citations: 1

Authors: Tan, Xue; Jin, Fujie; Dennis, Alan R.

Abstract: We conducted three studies to examine how two types of user-generated feedback, ... Expand

Abstract: We conducted three studies to examine how two types of user-generated feedback, appreciation and attention, affect users' decisions to make voluntary knowledge contributions to electronic networks of practice (ENPs). Appreciation is reflected in positive ratings, votes, and helpfulness evaluations. Attention is reflected in the number of views of contributed content. The first study used clickstream data from a college application ENP in China, where information seekers can read posted information asynchronously and request synchronous consultations with volunteers. The second study was a controlled online experiment in the United States where we assessed users' willingness to answer questions in a college application ENP asynchronously. The third study examined knowledge contribution across a diverse set of topics using a well-established ENP that serves more than 100 countries. In all three studies, the results consistently show that greater appreciation increased continued knowledge contribution, but greater attention without sufficient appreciation negatively affected contributions. Our findings show the theoretically intertwined nature of attention and appreciation and offer insights for the design and management of ENP feedback systems to encourage user contributions. Collapse

Topics: application programming interface mobile system personality IT skill knowledge sharing

Methods: instrumental variables estimation descriptive statistic experiment longitudinal research robustness check

IT Identity: A Measure and Empirical Investigation of its Utility to IS Research

2020 | Journal of the Association for Information Systems | Citations: 44

Authors: Carter, Michelle; Petter, Stacie; Grover, Varun; Thatcher, Jason

Abstract: Because use is the critical link between information technology (IT) investments ... Expand

Abstract: Because use is the critical link between information technology (IT) investments and organizational performance, IS researchers have focused attention on the post-adoption phase—after organizational IT are installed and used by employees in their work. To that end, recent theoretical work introduced IT identity—representing the strength of individuals’ self-identification with an IT—as a means to explain richer, post-adoption, IT use behaviors. Utilizing multiple methods and surveys, and focused on use of two different technologies, this study develops theory-based measures to establish IT identity’s utility for expanding the understanding of post-adoption use. Results show IT identity predicts different IT use behaviors and richer forms of use. Further, IT identity maintains its predictive validity when embedded in a model with other predictors. Given the importance of such value-creating behaviors in today’s multi-functional-platform based IT environments, our findings suggest future research consider IT identity an instrumental part of models seeking to explain IT use in post-adoption contexts. Collapse

Topics: smartphone information system use spreadsheet mobile phone systems analysis

Methods: survey data transformation factor analysis survey design SEM tool

Ideological shifts in open source orchestration: examining the influence of licence choice and organisational participation on open source project outcomes

2020 | European Journal of Information Systems | Citations: 0

Authors: Medappa, Poonacha K.; Srivastava, Shirish C.

Abstract: Though volunteer-driven Free (Libre) and Open Source Software (FLOSS) developmen ... Expand

Abstract: Though volunteer-driven Free (Libre) and Open Source Software (FLOSS) development were founded on the ideological beliefs of “openness” and “absence of any commercial appropriation”, in recent years, FLOSS movement has witnessed two ideological shifts. First, the emergence of “permissive FLOSS licences” that allow commercial appropriation of the collaboratively developed code, and second, “organisational ownership” of FLOSS projects. Because ideological beliefs shape the motivational needs of the volunteer contributors, and motivational needs influence the dominant work structures, it is expected that ideological shifts could influence the mechanisms through which work is orchestrated in FLOSS projects. Motivated by the need to understand the impact of these ideological shifts, we theorise the mechanisms through which the two ideological shifts alter the influence of FLOSS work structures on project outcomes of popularity and survival. Adopting an instrument variable approach, our analysis of projects hosted on GitHub confirms the significance of both the ideological shifts with some interesting contextual differences across the two project outcomes. Specifically, we find that the ideological shift pertaining to licence type has a significant influence on both the examined project outcomes, whereas organisational ownership has a significant influence only on the popularity of FLOSS projects. Collapse

Topics: programming language Google+ database system usability geographic information system

Methods: regression analysis method statistical hypothesis test theory development survival analysis Lagrange multiplier test

The differential impact of types of app innovation on customer evaluation

2020 | Information & Management | Citations: 7

Authors: Tian, Hengqi; Grover, Varun; Zhao, Jing; Jiang, Yi

Abstract: Digital innovation literature seldom considers the effects of innovation from ap ... Expand

Abstract: Digital innovation literature seldom considers the effects of innovation from app developers’ perspective. Even when it does, the findings on the value of app innovation are mixed. Based on technological innovation and early-mover advantages literature, we delineate types of app innovation and their impacts on customer eva­ luations. Our empirical results indicate that adding new business functions to provide new categories of product or service offerings increases customer evaluations, whereas, adding new supporting service functionalities (SSFs) decreases customer evaluations. For followers that “imitate” innovations, the effect of adding SSFs on customer evaluations is negatively contingent on the quality of early-mover apps. Collapse

Topics: mobile application innovation management digital innovation mobile application market business function

Methods: longitudinal research autocorrelation analysis qualitative content analysis qualitative coding latent dirichlet allocation