Supply Chain Management: An International Journal

Purpose – The paper aims to examine the impact of information technology (IT) on the financial performance of third-party logistics (3PL) firms in China.

Design/methodology/approach – A questionnaire-based mail survey was conducted in mainland China. Path analysis and spline regressions were used to model the relationship between IT and financial performance.

Findings – This study found that IT can significantly improve 3PL firms’ financial performance and there are complementarity and plateau effects of influencing financial performance between IT advantage and executives’ involvement in both IT and business strategy planning.

Research limitations/implications – The modeled relationship between IT and competitive advantages may not hold in different cultural environments and industrial settings. The sample size was small. Perceptual performance data were used.

Practical implications – To achieve better financial performance, it is essential for 3PL firms to sense strategically the importance of IT and commit sufficient managerial efforts and resources to achieve IT competency. In addition, IT executives should involve themselves in strategic business planning to better understand business strategies.

Originality/value – The results of this study – which constitutes the first to investigate IT in the 3PL industry in China – provide empirical evidence and a better description of the relationship between IT and financial performance. The findings provide valuable managerial guidance and insights for logistics managers.