Start Date
17-10-2025 9:30 AM
End Date
17-10-2025 10:00 AM
Location
MH358
Submission Type
Abstract
Track
Accounting and Finance
Abstract
This study investigates the causal impact of Chief Information Officer (CIO) presence on firm operational efficiency. While CIOs are widely regarded as key drivers of digital transformation and strategic alignment, empirical evidence on their operational impact remains inconclusive. Using a dataset from 2004- 2019, we employ a two-stage least squares (2SLS) instrumental variables approach to estimate the effect of CIO presence (CIO) on operational efficiency, controlling for firm fixed effects. To address endogeneity concerns, we instrument CIO presence with PEERCIODENSITY, defined as the proportion of peer firms in the same industry and year that have a CIO. On average, CIO presence is associated with lower short‑run operational efficiency, and the magnitude of this association is contingent on firm context. . These findings are robust to alternative measures of operational efficiency. Additional tests suggest that the negative effect of CIO presence on overall efficiency is primarily reflected in reduced asset utilization and labor efficiency, as captured by lower fixed asset turnover and revenue per employee. In additional tests, we find this negative association is mitigated in firms with foreign operations and firms with merger and acquisition activities. Lastly, looking at a sample of CIO firms, we find that while CIO presence is generally associated with lower operational efficiency, this negative effect is mitigated when CIOs have broader professional ties. That is, within the subsample of firms with a CIO, stronger CIO networks are positively associated with operational performance.
Included in
The Operational Impact of Chief Information Officers: Evidence from a Two-Stage Least Squares Approach
MH358
This study investigates the causal impact of Chief Information Officer (CIO) presence on firm operational efficiency. While CIOs are widely regarded as key drivers of digital transformation and strategic alignment, empirical evidence on their operational impact remains inconclusive. Using a dataset from 2004- 2019, we employ a two-stage least squares (2SLS) instrumental variables approach to estimate the effect of CIO presence (CIO) on operational efficiency, controlling for firm fixed effects. To address endogeneity concerns, we instrument CIO presence with PEERCIODENSITY, defined as the proportion of peer firms in the same industry and year that have a CIO. On average, CIO presence is associated with lower short‑run operational efficiency, and the magnitude of this association is contingent on firm context. . These findings are robust to alternative measures of operational efficiency. Additional tests suggest that the negative effect of CIO presence on overall efficiency is primarily reflected in reduced asset utilization and labor efficiency, as captured by lower fixed asset turnover and revenue per employee. In additional tests, we find this negative association is mitigated in firms with foreign operations and firms with merger and acquisition activities. Lastly, looking at a sample of CIO firms, we find that while CIO presence is generally associated with lower operational efficiency, this negative effect is mitigated when CIOs have broader professional ties. That is, within the subsample of firms with a CIO, stronger CIO networks are positively associated with operational performance.
