Profiting from IT-based capabilities in SMEs: firm-level evidence from Italy

Drawing on the resource-based-view and contingent studies, this paper examines the diffusion patterns of the capabilities that Small and Medium Enterprises (SMEs) develop from Information Technology (IT) use and how the industry environment affects their impact on profitability. Data are gathered through a sample survey conducted among firms in Italy in 2009. Results show that in more dynamic industries firms enjoy lower returns on profitability from their IT-based capabilities. By contrast, industry munificence has positive moderating effects on the returns firms experience from enriching their capabilities base through IT. Managerial implications of these results are discussed.