Analyzing the Link between Inventory Turnover and Technical Efficiency : Moderating Role of it Intensity

In this study, we examined the moderating effect of information technology (IT) on the relationship between inventory management and firm performance. To achieve this, we adopted technical efficiency as a variable of firm performance, used inventory turnover as an indicator for evaluating the performance of inventory management, and selected IT intensity as a variable for measuring the level of IT invested in the firm. Moreover, we relied on a two-stage estimation; in the first stage, we applied the SPF model to estimate technical efficiency, and in the second stage, we employed the panel regression model to analyze the moderating effect of IT intensity on the relationship between inventory turnover and technical efficiency as well as the effects of both inventory turnover and IT intensity on technical efficiency. By doing so, we found three significant results: (a) the positive effect of inventory turnover on technical efficiency; (b) the positive effect of IT intensity on technical efficiency; and (c) the positive moderating effect of IT intensity on the association between inventory turnover and technical efficiency