Leveraging Digitalization of Services for Performance: Evidence from the Credit Union Industry

We investigate contingent effects of digitalized B2B transactions (DBT), digitalized customer access (DCA), and digitalized core services (DCS), on performance of service firms. We theorize positive moderation effects of DBT and DCA on the relationship between DCS and performance. We also argue that advertising investment complements the moderating role of DCA on the relationship between DCS and firm performance. Further, we posit that participation in an inter-organizational network enhances the moderating role of DBT on the relationship between DCS and performance. Our empirical analysis of archival data from annual reports and publicly available information of 7,000 credit unions across the United States over a nine-year period largely supports our theoretical model. An important, albeit counter-intuitive finding, is that DCA has a negative moderating effect on the DCS-performance relationship. Overall, we uncover contingencies in the link between digitalization of services and firm performance, and demonstrate how investment strategies influence these relationships.