Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


Information Technology Adaptation, Voluntary Disclosure, Open Innovation and Sustainable Performance: Evidence from Bank-Based Financial Institutions in Bangladesh

Author(s): Salma Karim, Md. Qamruzzaman, Ishrat Jahan

The motivation of the study is to gauge the impact of information technology adaptation, voluntary disclosure, and open innovation on sustainable financial performance in bank-based financial institutions in Bangladesh for the period spinning 1990-to 2019. The study considered a sample of 30 bank-based financial institutions enlisted in the Dhaka stock exchange, and all the pertinent data were collected from publically available annual reports. To investigate the coefficients magnitude of IT adaptation, voluntary disclosure, and open innovation, the study employed cross-sectional panel regression particularly, random effects and fixed effects regression estimation. The Hausman test statistic confirmed that the fixed effects regression model is robust and efficient in output estimation and the proposed hypothesis. Study findings revealed that IT adaptation positive and statistically significant tie with all four measure of sustainable financial performance, suggesting the validation of the hypothesis that IT adaptation enhances a firm’s financial performance. Refers to voluntary disclosure impact of sustainable financial performance, the study documented positive and statistically significant linkage. It suggests that voluntary disclosure reduces information asymmetry in the market, thus boosting investors’ confidence and positively affecting stock price behavior in the capital market. Finally, the impact of open innovation on a firm’s financial performance the study disclosed mixed associations between them. The measures of Return of Assets (ROA) and EPS have exposed negative and statistically significant linkage, whereas Return of Equity and Tobin’s Q revealed positive and statistically significant bondage. In conclusion, it is established that sustainable financial performance is measured subject to measures selection, and due to inconclusive measures, the impact of target variables varies very often. However, to ensure sustainability in financial performance, it is imperative to have an appropriate strategic investment and disclosure decisions.

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