Path Dependence of Dynamic Information Technology Capability: An Empirical Investigation

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Abstract
Organizations seek to differentiate themselves in the marketplace by deploying information technology (IT) to develop dynamic IT capabilities and resist competitors' attempts to imitate or improve these capabilities. While this strategy has been justified on the grounds that dynamic IT capabilities are durably heterogeneous, there does not seem to be empirical evidence supporting or refuting this assumption. This study empirically validates the assumption of durable heterogeneity of dynamic organizational IT capability (ITC) due to path dependence. We capture ITC heterogeneity by introducing a framework in which firms try to achieve ITC leadership in their industry and we propose that durable ITC heterogeneity can be attributed to path dependence, and hence, it can be tested using Heckman's true state dependence of ITC leadership status. Using random and fixed effect dynamic logit models, we investigate true state dependence of ITC leadership on a sample of large U.S. firms. The results, which are robust ...

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