Impact of IT Interlocks on IT Innovation Capability : A Resource Dependence Perspective

The topic of information technology (IT) innovation in non-IT firms has gained considerable attention. However, developing IT innovation capability can be challenging due to technological complexities and knowledge requirements. To overcome this, firms seek external sources of IT knowledge, such as interlocking with IT firms through board directors, known as IT interlocks. Drawing on resource dependence theory, we examine the impact of IT interlocks on non-IT firms' IT innovation capability using a comprehensive sample of Chinese-listed firms from 2007 to 2020. Our analysis demonstrates a positive relationship between IT interlocks and IT innovation capability. Moreover, this relationship is strengthened by the focal firms' IT absorptive capacity and the knowledge intensity of interlocked IT partners. We address endogeneity concerns and ensure our findings' robustness through rigorous tests. We discuss these implications and provide insights on leveraging IT interlocks for successful IT innovation capability development